Sept. 6 (Bloomberg) -- European financial companies gained, led by Spanish insurer Mapfre SA and UniCredit SpA, Italy’s biggest bank, after European Central Bank President Mario Draghi said policy makers agreed to an unlimited bond-buying program.
Mapfre climbed as much as 13 percent in Madrid trading and UniCredit jumped as much as 8.6 percent in Milan. Credit Agricole SA, France’s third-biggest lender, advanced as much as 9.4 percent as the 38-member Bloomberg Europe Banks and Financial Services Index rose 4.5 percent by 5:04 p.m. Frankfurt time.
Draghi said today that policy makers agreed to a bond-buying program without limits to regain control of interest rates in the euro area. The ECB’s pledge to buy debt helped buoy financial stocks, said Simon Maughan, a financial strategist at Olivetree Securities Ltd. in London.
“Now we have a buyer for the bonds,” said Maughan. “Draghi has delivered pretty much as was leaked beforehand.”
The ECB will target government bonds with maturities of one to three years, including longer-dated debt that has a residual maturity of that length, Draghi said.
Purchases will be fully sterilized, meaning that the overall impact on the money supply will be neutral, he said. It will be up to governments such as Spain and Italy to trigger ECB bond purchases by requesting aid from Europe’s rescue fund and signing up for conditions.
To contact the reporter on this story: Charles Penty in Madrid at email@example.com
To contact the editor responsible for this story: Frank Connelly at firstname.lastname@example.org