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The head of the European Central Bank has told a European newspaper that he is not overly concerned by the crisis in the sub-prime mortgage market in the United States.
ECB president Jean-Claude Trichet told German daily Die Zeit that he shares the views of the Federal Reserve “which has been fully vindicated”.
He added that he is pleased with current state of credit markets in the euro-zone, saying the last few weeks have seen a correction of the under appreciation of risks in certain areas of the global finance system.
"At the moment I would say it has been a healthy correction. But I remain cautious, it is no time for complacency," he said.
Trichet discussed a number of issues in the issue such as the state of Asian currencies, and criticisms over the independence of the ECB.
He called on Asian economies to make their currencies more flexible.
In response to criticism by certain countries of the ECB’s monetary policies, he said: “"Everybody is welcome to criticise our policy - the media, the analysts, the academics. And we are, as an independent institution, as a last resort, accountable to the people of Europe.”
He added that he is not concerned by the euro-zone’s inflation rate, even though it has been slightly higher than the ECB’s two percent or below target.
The ECB has raised interest rates by one percent in the last year and is expected to add at least another quarter of a percent in September.
13:34
Posted on Jul-25-2007
