Markets likely to test ECB’s anti-fragmentation tool

ECB could struggle to avoid political disputes over TPI instrument, some observers warn

Euro symbol, Willy Brandt Platz, Frankfurt

Financial markets are likely to test the new anti-fragmentation tool unveiled by the European Central Bank on July 21, several observers say.

The ECB’s governing council surprised markets increasing interest rates by 50 basis points, after signalling a 25bp increase in its previous policy meeting in June. It was the institution’s first rate hike since 2011, and in doing so it abandoned negative rates for the first time since June 2014.

However, observers rapidly focused on the ECB’s second

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