March 20 Reuters Euro zone government bond yields reversed some of their earlier falls on Monday as a rush into safehaven assets slowed down, with investors warming up to the idea that the latest measures might have reduced the risks of a banking crisis in Europe.

UBS will pay 3 billion Swiss francs 3.2 billionfor Credit Suisse, and the Swiss central bank SNB said it would supply substantial liquidity to the merged bank.

Top central banks joined forces in a coordinated action to enhance the provision of liquidity through their standing U.S. dollar swap line arrangements.

The bloc39;s banks borrowed just 5 million from the ECB on Monday via an enhanced dollar swap facility.

German government bond yields hit their lowest since midDecember, with the 10year yield , the bloc39;s benchmark, down 7 basis points to 2.06 after reaching 1.923.

Investors39; flight to quality might continue but more moderately after recent developments, said Massimiliano Maxia, a senior fixedincome strategist at Allianz Global Investors.

The market will soon shift focus to the U.S. banking system ahead of this week39;s Fed policy meeting, he added.

The spread between Italian and German 10year yields was last at 193 bps after hitting its widest level since early January at 205.6 bps.

Italy39;s 10year yield dropped 5.5 bps to 4.00. Bond yields move inversely with prices.

There is uncertainty about the rate outlook as we don39;t know the level of contagion among banks, and we don39;t know…