ECB to create new tool to address fragmentation risk in euro zone

ECB had an unscheduled, emergency meeting earlier on Wednesday to address higher borrowing costs for many European govts

The European Central Bank will skew reinvestments of maturing debt to help more indebted members and will devise a new instrument to stop fragmentation, it said on Wednesday, seeking to temper a market rout that has fanned fears a new debt crisis.

Government bond yields have soared on the 19-country currency bloc's periphery since the ECB unveiled plans last Thursday to raise interest rates in July and September to tame painfully high inflation that is at risk of becoming entrenched.

The sell-off was exacerbated by the absence of any concrete plan from the ECB to limit this rise in borrowing costs, raising