The ECB's bond buying scheme shows its determination to preserve the euro but the plan will not restore bond spreads to pre-crisis levels by itself, Central Bank Governor Patrick Honohan said.

"The ECB has made clear its determination to do what is necessary to preserve the euro. The Outright Monetary Transactions provides the necessary tools to deliver on that commitment," Professor Honohan said.

He made his comments during a speech to the Bank of International Settlements in Basel, Switzerland today.

"It is not to be expected that the OMT will by itself restore the tight uniformity of spreads that prevailed for the first decade of the euro,'' he added.

Professor Honohan also said that while Irish sovereign spreads are no longer ''bloated'', they still reflect a credit risk premium that is poor reward - so far - for the country's sizeable fiscal adjustment effort.

He added that the ''pernicious feedback loop from banks to sovereign and from sovereign to banks that re-emerged in the crisis remains strong and damaging''.

He said that getting back to the ''good'' equilibrium will require a heading process which takes away the market's fear of default.

''It is inevitably a protracted process needing only only firm adherence to consistently disciplined policies but also the creation of institutions that can prevent future crises, or at least cope with them better if they cannot be avoided,' the Central Bank boss said.