March 14, 2019 / 6:06 PM / 6 months ago

Italy's borrowing costs kept high by perception debt won't fall - BoI

MILAN, March 14 (Reuters) - The cost of Italy’s debt remains elevated due to investors’ perception its size will not go down from its current very high level, the country’s central banker said on Thursday.

Speaking at Naples’ Federico II University, Bank of Italy Governor Ignazio Visco said smaller Italian banks were proportionally bigger buyers of domestic government bonds than their larger peers and the situation warranted monitoring, though the real problem was the actual public debt level.

Italy must raise around 400 billion euros in debt on the markets every year to cover its budget deficit and refinance a debt pile that runs at more than 1.3 times domestic output. (Reporting by Valentina Za and Giuseppe Fonte, editing by Michael Urquhart)

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