ECB's Panetta repeats conditions emerging for monetary easing

ROME (Reuters) - The risks to price stability in the euro zone are diminishing, creating the conditions for the European Central Bank to ease its monetary policy, governing council member Fabio Panetta reiterated on Thursday.

Numerous ECB policymakers have flagged an interest rate cut for June, a first step in bringing down the record high rate of 4% it currently pays on bank deposits.

"The ECB's restrictive monetary policy is dampening demand and contributing, along with the decline in energy prices, to a rapid fall in inflation," Bank of Italy governor Panetta said in a speech in Rome.

"The risks to price stability have diminished and the conditions are materialising to launch (a process of) monetary easing," he added.

Panetta issued the same message at a speech on Monday, when he said that a consensus for a rate cut was emerging on the ECB's governing council, thanks to falling inflation.

(Reporting By Gavin Jones)