May 16, 2019 / 8:54 AM / 2 months ago

ECB's Visco says monetary policy not 'disarmed' in case of euro zone recession

FILE PHOTO: Bank of Italy Governor Ignazio Visco speaks during a meeting in Rome, Italy, October 31, 2017. REUTERS/Remo Casilli

MILAN (Reuters) - The European Central Bank has got tools to use if the euro area economy were to fall into a new recession, ECB’s Governing Council member Ignazio Visco said on Thursday.

As the economic prospects for the region are currently dominated by uncertainty, Bank of Italy’s governor said it was a mistake to fear that monetary policy would be “disarmed” should the situation degenerate into a full-blown recession or lead to deflation.

“Central banks can rely on a wide range of instruments to support economic activity and, if necessary, the Eurosystem is ready to use them all in order to fulfill its mandate,” Visco said in the text of a speech published in the Bank of Italy’s website.

Reporting by Giulio Piovaccari and Giuseppe Fonte; editing by Francesca Landini

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