ECB President: Confidence Crucial in Surviving Crisis

2009 will be a "very difficult year" for the economy, and added he expects to see a recovery in 2010, Trichet said. Photo by BGNES

People's trust in authorities is crucial for exiting the current financial crisis, and uncertainty in politics will postpone restoration.

The European Central Bank President, Jean-Claude Trichet, made that announcement during a speech in Tokyo Friday, Darik Radio reported.

"Public authorities, executive branches, and central banks must do all they can to restore, preserve and foster confidence among households and corporations in order to pave the way for sustainable prosperity. This calls for a measured response to changing conditions", he said.

2009 will be a "very difficult year" for the economy, and added he expects to see a recovery in 2010, Trichet said

The ECB's 22-member Governing Council is divided over not only how low to cut borrowing costs but also whether to adopt unconventional monetary policy tools such as the purchase of debt assets to help revive its ailing 16-nation economy. The bank this month cut its benchmark less than economists had forecast, by a quarter point to 1,25%, and delayed a decision on new policy tools until its next meeting in May.

 

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