At a conference in Tokyo, European Central Bank President Jean-Claude Trichet emphasized the need for price stability. He stated that ECB policy was "geared" towards price stability and that such measures would also lead to financial stability as a whole. Nonetheless, he believes that inflation expectations are still firmly anchored.
He then touched on financial regulation, stating that the world needs to make a “quantum leap” in assuring that banks do not take on excessive risk.
He then noted that to inspire confidence in the markets, that fiscal sanity would be required to be maintained. At its May 7 meeting, he plans to take European financing into consideration.
During the speech he insinuated that he would be clearer in communicating the policy directive of the bank. He stated that ambiguity in policy direction would delay a recovery.
