Spread rise threatens families, banks – Visco

Higher bond yields depress wealth says Bank of Italy governor.
Spread rise threatens families, banks – Visco
02 November 08:19 2018 Print This Article

Bank of Italy Governor Ignazio Visco warned of “serious consequences” for families and banks if the recent rise in the yields on the nation’s State bonds continues for a “prolonged” period of time.

He said that households hold around 100 billion euros of State bonds, directly or indirectly, while the banks and companies that manage their savings have around 850 billion.

Italia Economy Minister Giovanni Tria defended the government’s plan to run a deficit of 2.4% next year, a move that had led the European Commission to reject Italy’s draft budget for 2019.Tria acknowledged that the economy was slowing down, after statistics agency ISTAT reported Italy’s GDP was flat in the third quarter with respect to the second. But he added that “it is difficult for growth to accelerate again naturally,” saying the government wanted to stimulate it via budget policy.

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