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ECB's Trichet -ECB exit should not be concern

Published 10/15/2009, 08:00 AM
Updated 10/15/2009, 08:03 AM

FRANKFURT, Oct 15 (Reuters) - There should not be any concern about the European Central Bank's capability to exit from the non-traditional measures taken, European Central Bank president Jean-Claude Trichet said on Thursday.

He also pushed governments to think of their exit strategies from stimulus spending, as debt levels are reaching worrisome levels.

The ECB has provided banks with unlimited liquidity injections since early in the crisis and also has embarked on a programme to buy 60 billion euros worth of covered bonds.

"As the situation normalises, the non-standard measures need to be phased out, and the substantial policy stimulus must be withdrawn," Trichet said in a speech at a Volksbanken and Raiffeisenbanken event.

"When the appropriate time comes, there should not be any concern about the ECB's ability to exit."

Trichet said that not only central banks, but also governments must prepare their exit strategies and public debt and deficits raise concern.

"Central banks are not the only authorities that need a credible exit strategy. The governments, too, need such a strategy," Trichet said.

"The debt and budget deficits of a number of euro area governments have reached worrying levels." (Reporting by Sakari Suoninen and Marc Jones)

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