EU: Credit Crunch Not Over
Monday, May 19th, 2008European Central Bank president Jean-Claude Trichet warned Europe that the credit crunch is not over yet. Central banks should not be cutting interest rate at this point. Doing so will result in further economic instabilities, according to the president. Mr. Trichet went as far as to compare the credit crisis to the 1970s oil situation. He continued by saying that tighter monetary policy is needed for economies to absorb further challenges to stability.
The credit crunch is continuing and it is not evident that the worst is over, the head of the European Central Bank has told the BBC.
Jean-Claude Trichet said we were seeing “an ongoing, very significant market correction,” during an interview with the BBC business editor Robert Peston.