June 11, 2018 / 2:59 PM / 9 days ago

Italy's market watchdog chief reassures investors on euro membership

MILAN (Reuters) - The newly appointed head of Italy’s markets authority reassured investors on Monday about the country’s commitment to the euro, echoing comments made a day earlier by the new economy minister.

Mario Nava, formerly a senior official at the European Commission, said he had no doubt that the savings of Italian citizens would remain denominated in euros, adding that the currency was “rock solid”.

“Markets are a delicate thing, better not unnerved,” Nava told a press conference after an annual meeting between the market watchdog Consob and investors.

Italy’s government debt has come under concerted selling pressure and the stock market has wobbled in the past two weeks as investors fretted that eurosceptics within the new government might try to drag Rome out of the euro zone.

Among the government’s members sworn in at the beginning of the month was economist Paolo Savona, picked as EU affairs minister after his appointment to head the economy ministry was vetoed by Italy’s head of state given his critical views on the euro.

Nava said the authority has been keeping a close eye on the fluctuations on Milan’s stock exchange recently, but he used a conciliatory tone when speaking about the government.

“I greatly appreciated the interview by the economy minister... We will have a very good dialogue with the government,” he said, referring to a newspaper interview with Economy Minister Giovanni Tria that ran on Sunday.

In the interview, Tria told Corriere della Sera that Italy’s new coalition government had no intention of leaving the euro and planned to focus on cutting debt levels.

Presenting his seven-year programme at the market authority, Nava said Consob wanted to increase the number of companies listed in Milan, adding there was room for Italian households to raise their equity investments and cut in parallel their bond holdings.

Shares of listed companies account for only 2 percent of Italian households’ total financial assets, half the euro zone average, according to data from the authority.

Talking about short positions investors can take on government debt to bet on a drop in bond prices, Nava said Consob had asked to lower the threshold above which an investor is forced to disclose their position.

“European authorities seem willingly to discuss the revision of this threshold,” he said, adding that the threshold is currently too high to be meaningful.

Additional reporting Elisa Anzolin and Paola Arosio; Editing by Hugh Lawson

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