ECB president upbeat on global economy
According to European Central Bank president Jean-Claude Trichet, recent upheaval in global markets will have little lasting impact on economic growth. He called what went on in the markets a “correction” and said that it would not lead to a correction in “the real economy”. Mr. Trichet also said that the recent events served a useful purpose in reminding all involved that there are inherent risks in all markets. He implied that perhaps that reminder was needed in an environment where the willingness to take risks has been at a high level recently.
The financial community could give Mr. Trichet’s remarks considerable credibility on the grounds that remarks he made at the Davos summit in January could be seen as predicting the recent declines in the markets. He said then that he saw global financial conditions as “unstable” and that a correction could be coming up.
Mr. Trichet’s remarks show that he remains optimistic about the global economy, including the US economy. He has endorsed current Federal Reserve chairman Ben Bernanke’s upbeat take on the economy in the US rather than former chairman Alan Greenspan’s recent remarks indicating that he sees a possible US recession coming up.
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