December 4, 2019 / 4:11 PM / 2 months ago

Bank of Italy's Visco says ESM new conditions reduce debt costs

ROME, Dec 4 (Reuters) - A reform of the euro zone bailout fund which would help prevent holdout investors blocking a debt restructuring to get a better deal reduces the cost of sovereign debts , Bank of Italy Governor Ignazio Visco said on Wednesday.

During a parliamentary hearing, Visco addressed a frequently-voiced concern that introducing new conditions called “single limb collective action clauses” (CACS) in sovereign bond issues, as envisaged by the reform of the European Stability Mechanism (ESM), would make debt restructurings more likely.

“I believe that the “single limb” (clauses) reduce debt costs rather than increasing them,” Visco said.

Reporting by Giuseppe Fonte, writing by Giselda Vagnoni, editing by Silvia Aloisi

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