Italy, Spain Lead Debt Slump on Bets ECB Won’t Buy More Bonds

Italian 10-year bonds slid, leading a slump in higher-yielding sovereign debt, as the European Central Bank signaled it will stimulate bank lending rather than buying more securities to stem the region’s financial woes.

Spanish 10-year yields climbed by the most since before the euro was created in 1999 as ECB President Mario Draghi said the central bank wouldn’t necessarily step up debt purchases. German two-year note yields fell to a record low as the ECB cut its key rate to an all-time low of 1 percent and Draghi said the central bank will extend the lifetime and loosen collateral conditions for its loans to banks. Europe’s leaders will convene in Brussels today seeking agreement on ways to counter the crisis.