Bank of Italy Rossi: Without negative rates, Europe would have faced deflationary spiral

Speaking in Tokyo, Senior Deputy Governor of the Bank of Italy, Salvatore Rossi, commented on the negative interest rates policy adopted by the ECB.

Key Quotes:

Impact of negative rate some banking system is painful, but bearable

Without negative rate Europe would have faced deflationary spiral

The only way to raise interest rates is to raise nominal growth

See risks of European inflation expectations, de-anchoring

ECB is maintaining accommodative policy due to threat to inflation expectations