Visco wary of changing regulation on sovereign exposures
Italian governor acknowledges sovereign exposures are not risk-free, but questions whether changing prudential rules is necessary
Bank of Italy governor Ignazio Visco expressed scepticism on May 2, in regard to changing the prudential regulation of sovereign exposures, arguing there may be better ways of addressing sovereign risk.
Sovereign exposures are essentially subject to no concentration limits and a zero risk weight regime, Visco told an audience in Rome. However, the recognition there is "no truly risk-free asset" does not necessarily mean their regulatory treatment should change.
"I doubt that further changes in
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