ECB’s Bini Smaghi: Euro has fallen to realistic levels.

In a webcast with Italy’s La Repubblica Monday, ECB’s Lorenzo Bini Smaghi has said the ECB will not be a substitute for private banks and take over commercial loans. The official says monetary policy is not a tool to solve the market crisis and inflation fighting remains a main focus for the ECB. He did however admit price growth was slowing and also thought European growth would be almost flat in coming months.

Regarding the euro, Bini Smaghi said 1.5500 vs USD was too high, but that the euro’s recent weakness would not be a long-term trend and that current levels were realistic. He also opined that the euro had prevented the financial crisis from being a disaster and that the currency would remain strong. Back in the markets, EUR/USD has seen some slippage, presently down at 1.3585.