ECB Trichet: No Tightening Of Eurozone Monetary Environment

FRANKFURT (MNI) – The recent recovery of the euro and higher
overnight rates have not led to a de facto tightening of monetary
conditions in the Eurozone, European Central Bank President Jean-Claude
Trichet argued Thursday.

Declining yield spreads and the return of market confidence
“suggest that this is exactly the contrary,” Trichet told reporters
after the meeting of the ECB Governing Council here.

“A number of factors” have contributed to growing confidence,
Trichet said, citing first the “success” of bank stress tests as a “very
good way” of providing transparency and reassuring market players.

In addition, real economy developments and fiscal consolidation of
many Eurozone governments have boosted confidence, he said.

“We are in an environment that is incorporating a lot of other
factors in addition to the stress tests: elements of the real economy
that are better, decisions taken by a number of countries to go in the
right way in terms of fiscal retrenchment,” he said.

“It is this complex set of information that has been captured by
the market,” he explained.

[TOPICS: M$$EC$,MT$$$$,M$X$$$,MGX$$$]