Orphanides Says Fund Could Buy Bonds Instead of ECB

The ECB is pressing governments to take more responsibility for Europe’s sovereign debt crisis so that it can withdraw non- standard measures and return to its traditional role of inflation fighting. Euro-area finance ministers meeting in Brussels today have signaled they’re considering expanding their response to the crisis, which may include mandating the 440 billion-euro ($585 billion) EFSF to purchase debt.

German two-year government notes advanced for the first time in five days, pushing the yield down five basis points to 1.11 percent at 10:52 a.m. in London. The euro initially dropped before recovering to be little changed at $1.3287.

Orphanides’ comments “show that frustration at the ECB over government handling of the crisis and constantly having to act as the first line of defense is coming close to boiling point,” said Carsten Brzeski, an economist at ING Group NV in Brussels.