In many countries, sovereign yield spreads edged down when the programme was announced. Currently, yields stand at the lowest levels since the beginning of the crisis. The second feature of OMTs is that the insurance is partial. The objectives of the programme are clearly delimited. The ECB will only buy bonds with shorter remaining maturities.
The ECB does not aim to eliminate all spreads between sovereign bond issuers, because sovereign yields don’t have to be identical in a monetary union, and market discipline has a role to play. Nor is the ECB willing to purchase any amount of sovereign bonds necessary to balance governments’ inter temporal budget constraints.