BERLIN, Dec 3 (Reuters) - Italy’s representative on the European Central Bank’s governing Council said he favours bond purchases over interest rate cuts as a stimulus tool because their effects are broader and stronger.
“I prefer bond purchases to negative rates,” Bank of Italy governor Ignazio Visco told German business daily Handelsblatt in an interview published on Tuesday.
“Negative rates achieve little and have possibly damaging side effects on the financial system. The effect of bond purchases is stronger and more widespread.” (Reporting By Thomas Seythal; Writing by Francesco Canepa in Frankfurt; Editing by Andrew Heavens)
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