ECB's Visco warns over reform of European Stability Mechanism

FILE PHOTO: Bank of Italy Governor Ignazio Visco speaks to reporters during the G20 Finance Ministers and Central Bank Governors Meeting in Fukuoka, Japan June 9, 2019. Franck Robichon/Pool via REUTERS - Copyright POOL(Reuters)

By Reuters

Published on 15/11/2019 - 14:04•Updated 07/05/2024 - 21:35

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ROME (Reuters) - European Central Bank governing council member Ignazio Visco warned on Friday that moves to reform the European Stability Mechanism need to be carefully considered and could do more harm than good.

"The small and uncertain benefits of a debt restructuring

mechanism must be weighed against the huge risk that the mere announcement of its introduction may trigger a perverse spiral of expectations of default, which may prove to be self-fulfilling," Visco said in a speech in Rome.

(Reporting By Gavin Jones)

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Iranian carpet shop owner Ali Faez works at his shop at the traditional bazaar of the city of Kashan, about 152 miles (245 km) south of the capital Tehran, Iran.

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ECB's Visco warns over reform of European Stability Mechanism

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