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Le Temps - Switzerland | Friday, September 7, 2007

The ECB's wait-and-see stance is an avowal of impotence

Jean-Claude Péclet reacts to the decision announced by the European Central Bank (BCE) on Thursday, September 6th, to leave its interest rate unchanged at 4%, imitating the attitude of other central banks all over the world. "Central banks no doubt reacted a little fast by injecting liquidity without which things would be worse. The hitch is that it has been poured into a bottomless well. 'Transparency is the key to confidence', says Claude Trichet. 'Banks should do a better job communicating their potential losses', volunteers Deutsche Bank's Josef Ackermann. Nice idea, but a bit late. Should the provision of a transparent view of global risks undertaken not be a key element of all banking and especially central banks? To admit now that more time is needed to understand the mechanics of the crisis shaking global finances is a great avowal of impotence."

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