PanARMENIAN.Net

ECB head: a turning point could be near
11.03.2009 21:56 GMT+04:00

/PanARMENIAN.Net/ The head of the European Central Bank and some other
central bankers said the world’s economy is still slowing but
suggested a turning point could be near as massive fiscal-stimulus
packages, low interest rates and cheaper energy prices bolster
prospects for growth, The Wall Street Journal reports.

"We’re approaching a moment where we might have a pickup," said
European Central Bank President Jean-Claude Trichet in his most
optimistic assessment to date of tentative signs of stabilization in
some markets. He cited a modest rebound in corporate-bond markets as
one positive sign. He spoke to reporters on behalf of participants in
a meeting of central bankers from the world’s leading economies at the
Bank for International Settlements in Basel, Switzerland.

The ECB expects little recovery until 2011, with its central forecast
at 0 percent growth next year.

Mr. Trichet also suggested that investors, who last week drove major
U.S. stock indexes to 12-year lows, are underestimating the
significance of government efforts. Policy makers world-wide have made
"a very, very strong commitment … not to let any systemic
institution go under," Mr. Trichet said. This "may not be fully priced
in by the market."

The Trichet view isn’t shared uniformly among central bankers. Federal
Reserve officials have been struck in recent weeks by the sharp
deterioration in stock prices.

Falling stock prices make it harder for banks to raise private
capital. Moreover, some credit-market conditions, which had shown
signs of improvement earlier this year, have worsened a bit amid a
stream of dour economic data.

Economic policy makers from around the world are jockeying for
position ahead of a gathering of finance ministers and central bankers
from the Group of 20 nations this weekend in preparation for a summit
of G-20 leaders on April 2. The U.S. is pressing for more aggressive
government spending to lift the global economy; others seek to use the
meetings to restructure global financial regulation.