These are times where quick decisions are indispensable, Trichet said and underlined the importance of improving co-operation between national authorities, both for preventing and for resolving shocks.
These are times where quick decisions are indispensable because the adverse consequences of a delayed – albeit right – decision may be considerable, ECB Trichet said in a speech in New York.
“Central banks are taking all the necessary steps to stop the downward spiral”, he underlined. “We are doing – and will continue to do – everything that is necessary to supply the requisite liquidity while preserving the solid anchoring of inflation expectations.” However, he also noted that it is also time for the private sector as well as public authorities to take action.
Trichet also underlined the importance of improving co-operation between national authorities, both for preventing and for resolving shocks.
With regard to crisis prevention the level of co-operation and exchange of information between central banks and supervisory authorities shall be heightened, he said.
Furthermore, there is a need to reinforce multilateral surveillance at the global and regional level to prevent future crisis, he said.
Trichet also called for intensified supervisory co-operation on a cross-sector basis for the crisis management. “All competent financial authorities, central banks, supervisors and ministries of finance should strengthen their co-ordination mechanisms for managing a crisis impacting cross-border financial institutions”, he said.
Following the meeting Mr Trichet is reported to have said that financial markets need discipline: macro-economic discipline, monetary discipline, market discipline. “Perhaps what we need is to go back to the first Bretton Woods, to go back to discipline”, he said.
Full speech
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