Davos WEF
Davos WEF

Italy central bank: We are lagging behind the world

Italy needs stablity for reforms: Central Bank governor

The governor of the central bank of Italy has said slowness to reform and political uncertainty in Italy has left it "lagging behind" other nations, partly due to the political instability the country has faced in recent years.

Speaking from the World Economic Forum in Davos, Switzerland, the Bank of Italy Governor Ignazio Visco said during his time in office at the central bank, he has seen five separate finance ministers come and go, which has dented foreign investment in the country.

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Ignazio Visco, governor of the Bank of Italy, right, and Mario Draghi, president of the European Central Bank (ECB), at a news conference in Naples, Italy, on Thursday, Oct. 2, 2014.
Alessia Pierdomenico I Bloomberg via Getty Images

"While (German finance minister) Mr. Schauble has been in office (in Germany) for the three years I have been governor of the Bank of Italy, I have had 5 finance ministers. This is a major problem – we need certainty for investment," he told CNBC.

"We are lagging behind a number of sectors, areas in innovation and technological change. We have had enormous change at the global levels in the last 20 years and we should really cut the distance. This is why you need stability in a number of areas, among them price stability and this is what we are trying to deliver," he said.

Visco also dismissed concerns that the euro could slide below the U.S. dollar, adding that euro dollar exchange rate, which has seen the euro fall to 11-year lows against the greenback after European Central Bank President Mario Draghi unveiled a new stimulus package on Thursday, was not a level central bankers monitored..

"Parity is a figure of imagination really. I have been the chief economist at the OECD when the euro was introduced, we were foreseeing that from $1.19 it should go to £1.30, it went to $0.80, so it's better not to talk about what is the target," he said.

"We do not target the euro, there is no question. This is a channel of transmission of monetary policy, we are doing monetary policy the old fashioned way, we are simply supplying money to the economy," Visco added.