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Bank of Italy urges ECB to be cautious in withdrawing stimulus

Published 04/06/2018, 05:31 AM
Updated 04/06/2018, 05:40 AM
© Reuters. The headquarters of the European Central Bank and the Frankfurt skyline with its financial district are photographed on early evening in Frankfurt

ROME (Reuters) - The Bank of Italy on Friday urged the European Central Bank to be cautious in making euro zone monetary policy less expansionary, warning of the risks of a sudden end to asset buying or sharp rises in interest rates.

"It's necessary that monetary policy remain expansionary for a long time," Fabio Panetta, one of the Italian central banks's four executive board members, said in a speech.

Normalizing monetary policy can be achieved without causing a negative shock for the euro zone economy or the financial system "as long as it is done in a context of robust growth and in a gradual way," said Panetta.

Italy is the euro zone's most sluggish economy and has its second highest public debt as a proportion of national output.

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