Spain Treasury to shield retail investors from negative yields

MADRID: The Spanish Treasury said on Friday it was taking steps to protect retail investors from the possible negative impact of low interest rates on buying short-term debt by annulling bids in any auctions where yields fall below zero.

Spain's bond yields have reached all-time lows in a backdrop of record-low European Central Bank interest rates and an economic recovery, creating a risk that yields on short-term bills could fall below zero, the Treasury said in a statement.

On Tuesday, Spain sold nearly 1 billion euros of 6-month T-bills at a yield of 0.08 percent, a fresh low.

The new measure will affect auctions during the rest of this year and in January 2015, the Treasury said.