Ignazio Visco, head of Italy’s central bank and member of the European Central Bank’s Governing Council told German newspaper Welt am Sonntag (on Sunday
) that the risk of deflation in the euro zone should not be underestimated, & the best way for the ECB to deal with the problem is buying government bonds
- “If the inflation figures remain very low for too long and the economy hardly grows, we risk being drawn into a downward spiral that will intensify itself on and on – that’s what we call deflation”
- “… cheap oil is helping the economy, no doubt. On the other hand it also leads to low prices. And that’s a problem when inflation rates are already near zero”
- “In this situation, the most effective means is buying sovereign bonds… We are discussing different options in the ECB’s Governing Council, also the purchase of other debt such as corporate bonds. But this market is not very big”
via Reuters, more there
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Note – this is from the weekend.
