November 20, 2018 / 9:06 AM / a year ago

Italian contagion on bond markets very limited: ECB's Nowotny

FILE PHOTO: Austria's National Bank, OeNB, Governor Ewald Nowotny speaks during an economics conference in Linz, Austria, July 5, 2018. REUTERS/Lisi Niesner

VIENNA (Reuters) - Contagion on European bond markets from Italy’s budget plans has been very limited, European Central Bank policymaker Ewald Nowotny said on Tuesday as the Austrian central bank he heads issued its half-yearly Financial Stability Report.

“The associated rise in Italian government bond yields only spilled over to other euro area countries to a very limited extent,” Nowotny said in a statement summarizing developments in recent months.

In its report, the Austrian National Bank renewed its calls on the country’s banks to become more efficient and take measures such as reducing their non-performing loans, adding: “The boom phase is set to give way to a slowdown in growth in the years to come.”

Reporting by Francois Murphy; editing by David Stamp

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