STEP 1-ECB buying bonds on a large scale if price risk persists … – Reuters Italy

STEP 1-ECB buying bonds on a large scale if price risk persists … – Reuters Italy

       

* With declining oil situation will worsen inflation

       

* Many of us ECB to support actions against deflation (Adds other statements)

       

Joseph Source

       

ROME, December 15 (Reuters) – The governor of the Bank of Italy, Ignazio Visco, is in favor of significant bond purchases by the European Central Bank in the short term if inflation continues to be very low or slip towards deflation.

       

“We are not in a situation of deflation, but the risks can not be ignored,” said Visco hearing in the Finance Committee of the House.

       

“If new information on inflation confirm the persistence or even aggravation of risks to price stability in the euro area need to be undertaken, in a timely manner, further intervention purchases of securities on a large scale in order to bring the size of the Eurosystem’s balance sheet on the desired levels. “

       

The ECB president, Mario Draghi, is considering whether to proceed next year the purchase of government bonds to prevent a deflationary spiral in the euro area.

       

With the collapse of oil prices price dynamics “will be worse in the coming months,” warned Visco.

       

“There is a strong issue for countries that have more debt, for this, at the level of the ECB, most of us claim that we should go in the direction of the containment of these risks.” More …