They reflect diverging fundamentals in different countries – ie the different economic situation and levels of public debt. It is questionable whether the convergence of yields in the years before the crisis reflected the right assessment of the various risks underlying these investments. Currently, refinancing conditions for the peripheral countries have improved notably. Hence, OMT will hopefully never have to be activated.
All of my remarks today represent my own views and not necessarily those of my colleagues on the Federal Open Market Committee. 1  -2There is evidence in recent weeks that we seem to be moving into a new phase of the economy.