- Deleveraging taking place simultaneously in all sectors
- Flight to quality has been beneficial for US debt
- Equating competitiveness with exchange depreciation “overly simplistic”
- Fall in bank shares shows market “overreaction” to expected economic slowdown
- Concerns over French banks is “unjustified”, total eligible collateral is 600 billion euros
- Price stability remains the absolute priority of the ECB
- High levels of current inflation are a source of concern for the general public
- Monetary accomodation faces strong headwinds in the real economy, uncertain as to its effectiveness to deal with deleveraging
- Would be unrealistic to expect a bigger EFSF, but open to schemes to leverage EFSF
- ECB sovereign debt buying will remain limited
Comments from the ECB council member and BOF Governor at a Paris conference today
