Italy central bank chief says bond spread is ridiculous

MILAN: Italy's central bank chief, Ignazio Visco, described the difference between Italian and German sovereign bond yields as ridiculous, saying it reflected unfounded fears that Rome could fail to repay its debts or might exit from the euro.

"This spread that we have is ridiculous because it also reflects the fear that we cannot repay our debts or that they will be repaid in another currency; in other words, an exit from the euro," Bank of Italy chief Visco, who also sits on the European Central Bank governing council, said on Wednesday.

"It's really stupid," he told a conference.

Italy's 10-year benchmark bond yields about 237 basis points over the equivalent German paper, sharply down from last month but still well above the risk premium imposed on neighbours Spain and Portugal and a little below that on Greek bonds.