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Risks to financial stability remain, says Consob

Regulator warns that deflation, new market bubbles a danger

14 January, 13:17
Risks to financial stability remain, says Consob (ANSA) - Rome, January 14 - Although the worst of the economic crisis is over, risks to financial stability remain, Giuseppe Vegas, the head of the Italian market regulator Consob, warned Tuesday.

Vegas told the House finance committee that the risk exists across the eurozone.

"In a scenario of moderate recovery, the risks to financial stability - especially in the euro area - remain significant," said Vegas.

A lesson of the global financial crisis that began in 2008 is that a coordinated response by regulators from around the world is essential, he added.

"The experience of recent years teaches that the responses of regulators should be more timely, more coordinated at the international level, but this requires that the ultimate decision-making power is increasingly concentrated on supranational supervisory bodies".

In his comments to the committee, Vegas also warned that he sees risks of deflation in the eurozone along with a danger of new financial market "bubbles" in other parts of the globe because of abundant liquidity and low interest rates.