–Trying To Restore Appropriate Functioning Of Markets
LONDON (MNI) – European Central Bank President Jean-Claude Trichet
said Thursday that it was clear that the money markets are not
functioning perfectly and so the ECB had had to take action.
Speaking at a press conference following the ECB’s monthly
Governing Council meeting in Frankfurt, Trichet said:
“We see there is a new tensions as far as demands for liquidity…
it means we have a money market that is not functioning perfectly,
that’s absolutely clear,” Trichet said.
Trichet said that the ECB was doing its best to restore order in
those markets and so assist the transmission of policy:
“One decision, one institution, one currency. We are helping to
restore appropriate functioning of markets, that were hampering monetary
policy transmission.”
Commenting on the latest ECB staff projections, Trichet said that
Q2 would be “much more buoyant”.
“We are in a situation which remains uncertain,” he said.
“We try to continue to be an anchor of confidence and will deliver
price stability.”
Trichet reiterated that the solid anchoring of inflation
expectations within the euro zone was the primary policy goal of the
ECB:
“Let me only say – as ‘appropriate’ – we mean according to the
market situation and the inflexible needle in our compass, which is our
major asset. I think that it was extremely important that the anchoring
of inflation expectations could function. Solid anchoring is something
of the essence for us”.
The ECB chief stressed once again that the euro remained a credible
currency due to track record of the central bank in achieving price
stability.
–London Newsroom: 00442078627492; email: dthomas@marketnews.com
[TOPICS: MT$$$$,M$$EC$,M$X$$$,M$$FX$,M$B$$$]
