Trichet says ECB in secondary bond market to stay

Reuters

PARIS (Reuters) - The European Central Bank is actively buying bonds on the second market and plans to continue to do so, President Jean-Claude Trichet said on Tuesday.

"We are in the secondary market," Trichet told Europe 1 radio. Asked whether the ECB planned to buy bonds direct from distressed European states. "This is not what we should do, and not what we can do," he said.

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On Monday, the ECB intervened in markets to buy Italian and Spanish bonds, forcing down Italian and Spanish borrowing costs after a weekend of crisis diplomacy between G7 and G20 leaders.

(Reporting by Alexandria Sage and Nick Vinocur; editing by Patrick Graham)