FRANKFURT (MNI) – The European Central Bank’s government bond
purchase program is aimed at ensuring the normal functioning of monetary
policy, ECB President Jean-Claude Trichet said in an interview with
German public television ZDF on Tuesday night.
“Our problem is that we want to keep normal monetary policy in
Europe functioning,” Trichet said. And since “we currently have markets
that not are functioning,” the central bank is employing extraordinary
tools to ensure that its monetary policy is taking effect in markets, he
said.
Trichet offered assurances that the ECB would avoid inflationary
pressures by draining all the extra liquidity it injects in the bond
buying process, “so that the monetary aggregate won’t change.”
“We are responsible for price stability in the Eurozone. Ensuring
price stability is our mandate and it is our firm commitment,” he said.
Trichet dismissed concerns over the ECB’s credibility and
independence.
The ECB announced a new program of sovereign debt purchases only
three days after Trichet declared to reporters that no such program had
been discussed.
“I said that we had not talked about this topic because it had not
been talked about,” Trichet insisted. However, “after Thursday, a
phenomenon emerged that was a new phenomenon and had global
implications,” he said.
On Friday, there were disruptions in a number of markets, Trichet
said. “This was a profound phenomenon for us because our monetary policy
was called into question,” he said. “That is why we did what appeared
necessary to us.”
“We will react flexibly and do what is necessary to ensure
stability during this crisis,” Trichet added.
He also said that the ECB decided its measures “with complete
independence.”
–Frankfurt bureau; +49-69-720142; frankfurt@marketnews.com
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