ECB Governing Council member Ignazio Visco, who is also the Bank of Italy's governor, warned that an excessive tightening would have "serious implications" for economic activity and financial stability. He reiterated that he saw this as a risk that carried the same weight as the danger of a too gradual tightening. "The policy tightening can now continue with the due caution, carefully assessing the implications for the economy and inflation prospects of the measures that have already been adopted," Visco told the annual conference of Italy's Assiom-Forex financial markets association. The ECB has kept its options open about subsequent steps after March, raising doubts among investors about its resolve to keep raising rates to tame inflation. Banking supervisors are monitoring specifically credit risks but also liquidity and refinancing risks, Visco said, adding there was a danger that higher rates fed into banks' funding costs more rapidly than in the past.

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