Outdoing Draghi?

Since the start of the coronavirus pandemic, markets have become increasingly reluctant to buy Italian government bonds as doubts have grown about the sustainability of that country's public finances and the solvency of its banks. In 2012, the last time that markets were doubtful about Italy's economic outlook, then-ECB President Mario Draghi managed to calm the waters by famously pledging to have the ECB do whatever it took to save the euro.

Christine Lagarde, who has now replaced Draghi, is trying to emulate her predecessor's feat. She is doing so by considerably expanding the ECB's quantitative...