CHRISTINE Lagarde, the president of the European Central Bank (ECB), is svelte, urbane and French. She knows better than to show up at a press conference and say brutish things - such as “Bring it on”, or “Go ahead, make my day”. Or even: “Don’t cross my red line.”

But a red line is, in effect, what she drew last week. Lagarde and her colleagues at the ECB are worried that rising interest rates, excessive debt and political turmoil will lead to Euro Crisis 2.0, which would start in Italy this time.

So she unveiled the so-called Transmission Protection Instrument (TPI). The name makes sense only to central bankers, if at all; TPI is best understood as “To Protect Italy”. Lagarde is signalling that, if yields on Italian bonds shoot up, the ECB will snap up the securities to stabilise their price. The point is to convince speculators to not even try. Put differently, the goal is deterrence.