European Central Bank President Jean- Claude Trichet said U.S. lawmakers must pass a $700 billion rescue package for banks to shore up confidence in the global financial system.
"It has to go, for the sake of the U.S. and for the sake of global finance," Trichet said in an interview in Frankfurt with Bloomberg Television late yesterday. "I am confident, but of course it is the decision of the U.S. Congress."
Trichet said a pan-European approach to the banking crisis was unlikely, saying "we are not a fully-fledged federation with a federal budget."
"Each country has to mobilize its own efforts," said Trichet. "But of course there is a European spirit and that is the spirit of the single market."
Trichet declined to answer questions about ECB monetary policy before tomorrow's interest-rate decision. All 58 economists surveyed by Bloomberg News expect the central bank to keep its benchmark rate at 4.25 percent.
European leaders are trying to better coordinate their response to the financial crisis. Luxembourg Finance Minister Jean-Claude Juncker said yesterday he expects to meet with Trichet and French President Nicolas Sarkozy on Oct. 4 to discuss "a more systematic approach."
Trichet's ECB has so far chosen not to follow the Federal Reserve in slashing interest rates since credit markets seized up 13 months ago, injecting cash into their markets instead, while keeping monetary policy focused on inflation.
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At a minimum, I expect a change in Trichet's stance on rate cuts. A big surprise cut is certainly not out of the question. Given that rules on virtually everything are changing every day, it is hard to say where the dollar is going but I still sense up, no matter how absurd that may seem.
The Eurozone and the UK both have severe problems as well.
Brown says rejection of US bailout 'very disappointing'
AFP is reporting Brown says rejection of US bailout 'very disappointing'
Prime Minister Gordon Brown has described the rejection of a 700-billion-dollar Wall Street bailout plan by the US House of Representatives as "very disappointing".US has responsibility to world to fix economy
Brown said he had told Washington he supported "decisive action" in the US financial markets amid continuing turmoil, and was prepared to do "whatever action is necessary" to ensure stability in Britain.
"The vote in America is very disappointing," Brown said, adding that he had "sent a message to the White House about the importance that we attach to taking decisive action" there.
Brown continued the pressure on Bush with this message: US has responsibility to world to fix economy.
The United States has a responsibility to the world and not just itself to sort out its teetering economy, Prime Minister Gordon Brown said Tuesday.Bailing Out Foreign Investors
But Brown, disappointed that US lawmakers have rejected a 700-billion-dollar Wall Street bailout plan, said it was not yet time to apportion blame for the global crisis.
"What people want to know is, on top of these problems, can we get under control ... these problems in the financial system," Brown told Sky News and BBC television.
"They started in America, they've got to be sorted out. I believe that the Americans have come to realise that they have a responsibility to the rest of the world as well as to themselves.
"In Britain, we will do whatever is necessary; however it is necessary to sort out the problems in the system."
He added: "There will be a time for sorting out the blame and clearly what happened in America has got to be analysed for its effect on Britain but this is the time to roll up our sleeves and sort out the system."
If you have not done so already, please consider the must see video Rep. Brad Sherman On Bailing Out Foreign Investors.
Those of us fighting the Paulson Bailout are now fighting
- President Bush
- Treasury Secretary Paulson
- House Speaker Nancy Pelosi
- House Finance Chairman Barney Frank
- CNBC Cheerleaders
- CNN Cheerleaders
- Bloomberg Cheerleaders
- Prime Minister Gordon Brown
- ECB President Jean-Claude Trichet
None of the above is bright enough to figure out that wasting $700 billion is exactly the worst possible thing to do.
Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
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