ECB's Noyer: bond buying needed to restore monetary policy function

TOKYO Mon Dec 3, 2012 12:19am EST

TOKYO Dec 3 (Reuters) - The European Central Bank's scheme to purchase government debt from euro zone countries is an important tool to ensure the proper functioning of monetary policy and to dispel fears of a breakup of the currency zone, ECB governing council member Christian Noyer said on Monday.

Noyer, who is also head of the Bank of France, said the scheme, known as Outright Monetary Transactions (OMT), could only be enacted if a euro zone country had negotiated a bailout and agreed to structural reforms, and this would bolster confidence in the euro zone.

Noyer, appearing at a seminar in Tokyo, also said it is ultimately up to governments to enact lasting solutions to the continent's three-year old sovereign debt crisis.

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