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ECB's Visco warns over reform of European Stability Mechanism

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 -
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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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