The government agency tasked with analyzing financial markets said Wednesday that the European Central Bank's bond-buying program was a major reason for the "fairly contained" financial market reaction to the recent breakdown in the talks to solve the Greek debt crisis. The Office of Financial Research, which is part of the Treasury Department, said reforms in the eurozone periphery and a reduction in private sector exposures to Greece were also factors. While there was a market reaction, "overall trading activity was relatively orderly and there have been no signs of aggressive de-risking or significant funding strains," the agency said in its monthly review of market developments. Still "a more disorderly outcome in Greece than market participants expect may test the stability of broader euro area markets," OFR concluded.
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