Off the wire
• Tsai tops international golfers at Tour Q School  • Belgium to open own investigation into Tunisia attacks  • News Analysis: Forming anti-terror joint Arab force faces challenges  • Turkish president calls on PKK to lay down weapons to advance in peace process  • Assad has no role in Syria's future: British FM  • China's Yunnan reports H5N1 bird flu human case  • 1st LD Writethru: U.S. Senator Ted Cruz announces presidential bid  • U.S. military convoy passes across Poland  • Xinhua world news summary at 1530 GMT, March 23  • Georgian troops participate in NATO-led mission in Afghanistan  
You are here: 　 Home

Bank of Italy's governor urges more investments to boost growth

Xinhua, March 24, 2015 Adjust font size:

More private and infrastructure investments to boost growth would be needed before the effect of the bond-buying program of the European Central Bank (ECB) comes to an end, Bank of Italy's governor Ignazio Visco said on Monday.

"The economic growth necessarily goes through a substantial increase in private and public investments at national and European level," Visco said in a meeting in Rome.

The ECB bond-buying program, also known as Quantitative Easing (QE), has impacted positively on the European macro-economic situation by reducing uncertainty and sustaining confidence, Visco said.

Yet, this effect would be destined to fade "when the program has reached its stated goal of ensuring price stability".

"This is the right time for a structural intervention on the economic growth potential, with tools aimed at enhancing both productivity and employment in order to create new incomes and new demand," Visco urged.

The key factor to sustain the growth in Italy would be to increase private investments and infrastructure spending, the governor added more specifically.

The QE program was launched by the European Central Bank in January, and started early in March.

With a massive purchase of government bonds issued by central banks in the euro-zone countries, the QE program aims at fending off deflation in Europe and boost the growth within the euro zone by inflating more money into the real economy.

Visco also urged government's intervention to ease the burden of the Italian banking sector.

A six-year-long recession "has left a heavy legacy in terms of bad loans... which weigh down Italian banks, restricting their ability to grant new loans to healthy and vital companies," Visco said.

According to both media and official sources, the Italian government would be considering setting up a so-called "bad-bank", backed by the state, in order to help lenders to get rid of non-performing loans, which means those loans that are least likely to be repaid.

Italian Economy Minister Pier Carlo Padoan made the remarks to local media in January, and confirmed Italy was "in a detailed discussion with the European Commission in Brussels" on the issue later in March.

According to Bank of Italy latest data, Italian banks' non-performing loans rose to 185.5 billion euros (202.5 billion U.S. dollars) in January 2015 from 183 billion euros in December last year. EndIt