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Ignazio Visco, the Governor of the Bank of Italy, stated on Thursday that the European Central Bank (ECB) is nearing a peak in interest rates after a series of rate increases.
During an interview with Italy’s Sky TG24 news channel, Visco reiterated his belief that it will take time for the effects of rate hikes to be fully reflected in the fight against inflation.
Visco also urged banks to allocate funds as a buffer against risks in the financial sector, rather than distributing profits to investors.
Over the past year, the ECB has consistently raised rates at each meeting, pushing the deposit rate to 3.5%, with a commitment to further tightening in an effort to control inflation that remains three times higher than its 2% target.
When asked if rates would reach their peak by the end of the year, Visco affirmed that this would indeed be the case.
Visco, regarded as one of the more dovish members of the ECB, will conclude his term at the end of October, and his position will be taken over by Fabio Panetta, an executive board member of the ECB.
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