Oct. 17 (Bloomberg) -- European Central Bank President Jean-Claude Trichet said the central bank must be allowed to remain credible in its defense of price stability.
“We were faithful to our mandate. It is not an easy mandate,” Trichet said in Vienna today when receiving a medal from Austrian President Heinz Fischer. “It is extremely important to see that in the next 10 years we are equally given the credibility to deliver price stability.”
Trichet, whose eight-year term ends on Oct. 31, has been forced to take the ECB into uncharted territory to battle the euro region’s sovereign debt crisis as politicians procrastinate over their response. Most controversially, the central bank has been buying government bonds to reduce market interest rates, a measure some policy makers say blurs the line between monetary and fiscal policy.
“We are in demanding times,” Trichet said today. “A number of sovereign signatories” have been “put into question, and that creates challenges to stability.”
Trichet said the crisis is global and all major advanced economies, including Europe, the U.S. and Japan, need to “revise their strategies.”
--Editor: Matthew Brockett
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