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Updated Tuesday, July 19, 2011 11:10 pm TWN, AP

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European Central Bank holds off on making more purchases of gov't bonds

FRANKFURT, Germany--The European Central Bank (ECB) made no use of its program to buy government bonds last week despite market speculation that it had weighed in to support Italian and Spanish bonds.

The bank said in a statement Monday that it purchased no bonds. It's the 11th straight week the bank has left the program idle.

A week ago, markets were abuzz with speculation that the bank had been purchasing bonds in an attempt to ease the selling pressure on Italian and Spanish bonds. Their bonds fell on fears that the eurzone's debt crisis was spreading to the eurozone's third and fourth largest economies from Greece, Portugal and Ireland.

The purchase program can support bond prices — but also increases the ECB's exposure to potential losses in case of a default.

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