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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum -- Ignore unavailable to you. Want to Upgrade?

To: Haim R. Branisteanu who wrote (93152)	8/5/2012 11:57:28 AM
From: Haim R. Branisteanu	Respond to of 217769

Bank Of Italy Head Sees ECB Easing Policy In Next Months 05-Aug-2012 -Bank Of Italy governor says Italy doesn't need to tap EU rescue funds for now -Visco says possible future aid request depends on multiple variables -Italy's State undersecretary says Italy wouldn't be afraid of signing MoU (Adds Catricala comments, background throughout.) By Giada Zampano ROME--Bank of Italy Governor Ignazio Visco said Sunday the economic and financial emergency is not over and, in light of persistent recessionary prospects, the European Central Bank may loosen its monetary policy in the next few months. Speaking to Italian daily La Repubblica, Mr. Visco, who is also a member of the ECB's Governing Council, said the outcome of the Aug. 2 ECB meeting was an important "step forward" for the stability of the common currency, adding he doesn't see Italy tapping euro zone rescue funds for now. Asked why the ECB didn't cut interest rates at the meeting, Mr. Visco said that if the economy continues to slow down "we can expect a more accommodating monetary policy in the next few months." Deciding that the ECB "can and must intervene" to remove obstacles to the monetary union if there are risks for the euro is a "turning point," Mr. Visco added. There wasn't a "division" among ECB council's members at the meeting, just "discussion," Mr. Visco said, adding that Bundesbank President Jens Weidmann expressed "well-known perplexities" regarding possible direct ECB bond-buying in the secondary market. The ECB may soon step in to buy government bonds on the open market and consider other unconventional measures to lower "exceptionally high" borrowing costs of financially stressed euro-zone economies, ECB President Mario Draghi said Thursday after the ECB council meeting. Mr. Draghi said such measures would occur only under strict conditions and after the struggling countries, such as Spain and Italy, submit a request for aid. "At present I don't see the need for Italy to tap" European rescue funds, the Bank of Italy governor told the paper. "[Italian prime minister Mario] Monti is on the right track, but now he needs to speed up reforms," Mr. Visco added. The Bank of Italy head added that, in prospects, a possible aid request from Rome would depend on several variables. "If the markets convince themselves that a turning point was passed, if Italy doesn't abandon fiscal discipline and steps up its efforts to promote growth, then there will be no need for a rescue fund intervention. Much depends on ourselves," he said in the interview. Italy has seen its debt costs tracking Spain's higher in recent weeks as it struggles to slash its EUR2 trillion debt pile amid economic recession. Italy's prime minister had lobbied his euro zone partners at key EU meeting in late June to activate a mechanism to intervene in bond markets and stabilize yields. Mr. Monti has since then repeated that Italy may be interested in the future in using this tool, in order to soothe the mounting market pressure on Italian bonds, but has also reiterated Italy doesn't need a Greek-style bailout. Both Spain and Italy have stopped short of requesting help from the European rescue funds because of the strict policy conditions they may impose on struggling countries. In a separate interview with Italian daily Il Corriere della Sera, State Undersecretary Antonio Catricala hinted that Italy will not ask for EU aid before a request from Spain, which is under much more intense pressure. But he also added Italy wouldn't be afraid of signing a memorandum of understanding, as part of the aid request process, since a MoU would only confirm commitments that Italy has already underwritten. "It's clear that we would never act first, as others would consider us mad. Our public finances are much more solid than those of many other countries," Mr. Catricala said. He added that a possible MoU would only be a "declarative act, with no new obligations" for Italy. Both Catricala and Visco acknowledged that markets are taking time to recognize the austerity steps taken by Italy's technocrat government, and that the future remained challenging for Rome and for the whole euro zone. Mr. Visco stressed that the world financial and economic emergency is not over, adding that "the crisis has worsened and 2013 will see a very low growth." (END) Dow Jones Newswires