The monetary authorities of the European Central Bank (ECB) are holding an extraordinary council meeting this Wednesday to discuss the consequences of the recent sell-off in the bond market.
"The Governing Council will hold an ad hoc meeting on Wednesday to discuss current market conditions," a spokesman for the euro central bank said on Wednesday.
No further details were given.
The ECB announced a series of rate hikes on Thursday.
Since then, bond yields have risen sharply.
The yield difference (spread) between German government bonds and those of more heavily indebted southern euro countries, especially Italy, had risen to its highest level in over two years.
The ECB's response to a bond market panic will depend on the circumstances it is dealing with, Executive Board member Isabel Schnabel said in Paris on Tuesday night.
“How we ultimately respond to the risks of fragmentation depends entirely on the situation we face.
"We have shown in the past that we can adapt flexibly and quickly to the respective circumstances."
Thanks to safeguards in place, the risk of so-called fragmentation -- an "unjustified" rise in bond yields for the more indebted members of the euro area -- is less likely today than it was a few years ago, said Schnabel, who oversees markets at the ECB.
Despite the sell-off in bonds since the announcement of the ECB's tightening plans, Schnabel's comments reflect an emerging consensus in the Governing Council.
According to this, a hasty presentation of a new instrument brings hardly any advantages, but exposes the monetary authorities to the risk of being put to the test by the market.