BRUSSELS (MNI) – The current economic environment remains
challenging and demands alertness, European Central Bank President
Jean-Claude Trichet asserted late Wednesday.
In a dinner speech, the text of which the ECB provided, Trichet
defended the new minimum bank capital requirements known as Basel III,
saying they were neither neither excessive nor lax.
“My colleagues and I are calling for perseverance and for resolve
in financial reform,” he said. “Our economic environment remains very
demanding. This is no time for complacency. It is a time to remain
alert, vigilant and inflexibly determined.”
The current financial crisis, Trichet said, “is an overwhelming
case of the materialization of systemic risk.”
Turning to Basel III, which he called “a big step upward,” Trichet
affirmed that, “overall I consider that our agreement strikes the right
balance between the objective of strengthening the resilience of the
financial sector and the need to avoid unduly severe implications for
national banking systems.”
“Some commentators suggest that the agreements are too lenient
while others argue that they are too tight. I do not share these views,”
Trichet said. The solution reached “strikes the right balance,” he
added.
“There are two things that are particularly remarkable: first, we
have been able to reach an agreement that is truly global,” Trichet
said. “Second, the end results are tougher standards.”
He said the transition agreements allowed banks to meet the new
requirements “while not endangering the progressive consolidation of the
recovery.”
–Frankfurt bureau tel.: +49-69 720142. Email: frankfurt@marketnews.com
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