Spread slides to 160 basis points on Draghi's words
Confidence boosted after ECB discusses 'unconventional' tools04 April, 12:22
At one point, the spread dipped to 160 basis points, with the yield on Italian 10-year paper falling to 3.23% after Mario Draghi said that the ECB would consider unconventional measures if necessary.
The bond spread is an important measure of investor confidence in Italy and of the country's borrowing costs.
Italy risked a Greek-style financial meltdown late in 2011 when the spread went over 500 points with yields above 7%.
On Thursday, the ECB held its main interest rate steady at 0.25%, while Draghi said that he would take whatever measures are needed to maintain price stability.
Draghi's pledge suggests the ECB is considering 'unconventional' measures that in other major countries has translated into buying government assets to help control interest rates.
"We will consider all instruments available to us," he said.
"We are resolute in our determination to maintain a high degree of monetary accommodation and act swiftly if required," added Draghi.
"The Governing Council is unanimous in its commitment to using...unconventional instruments within its mandate in order to cope effectively with risks of a too prolonged period of low inflation".