Archive for September 8, 2011

2011/09/08: QuickPost: ECB Press Conference: Trichet Gets It Wrong and Right

September 8, 2011 Leave a comment

It was a very animated monthly ECB post-rate decision press conference again today after the central bank left rates unchanged at 1.5%. And that is a a very interesting stance we will discuss further below. Suffice to say for now that Monsieur Trichet was very right on a couple of his views regardless of what his critics might say.

First of all, we maintain our general perspective that the ECB is one of the guys wearing white hats in this whole European sovereign debt crisis. The governments of the successful northern tier states have been talking a good game about the steps to alleviate pressure on the stressed peripheral Euro-zone sovereign debt markets. That goes all the way back to the initial phase of the Greek Sovereign Debt Crisis last May (as in 2010, not this year.) Yet, in fact they have done very little to expand the powers and provide the necessary funding for the European Financial Stability Facility (EFSF), the vehicle set up to stabilize those stressed sovereign debt markets.
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