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

TOKYO Mon Dec 3, 2012 12:20am EST

European Central Bank (ECB) governing council member Christian Noyer speaks at the Paris Europlace Financial Forum in Tokyo December 3, 2012. 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, Noyer, who is also head of the Bank of France, said on Monday. REUTERS/Yuriko Nakao

European Central Bank (ECB) governing council member Christian Noyer speaks at the Paris Europlace Financial Forum in Tokyo December 3, 2012. 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, Noyer, who is also head of the Bank of France, said on Monday.

Credit: Reuters/Yuriko Nakao

TOKYO (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.

(Reporting by Stanley White; Editing by Michael Watson)

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