Italy's ECB debt guarantee idea would be 'forbidden' financing: Rehn

[May 29, 2019]  LONDON (Reuters) - ECB policy maker Olli Rehn hit back on Wednesday at Italian calls for the central bank to guarantee euro zone countries' debt, saying it would be a forbidden step.

Italian Deputy Prime Minister Matteo Salvini called on Tuesday for a new role for the ECB, which should "guarantee" government debt in order to keep bond yields low.

"It is no surprise that I am not very fond of this idea as it goes against the principal of modern central banking that we are forbidden to do monetary financing," Rehn said at a Reuters Breakingviews event.

He added that Italy's high level of debt caused constraints for the country.

(Reporting by Marc Jones and Dhara Ranasinghe)

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