Outgoing European Central Bank President Jean-Claude Trichet gave his final press conference after a rate decision today.This marks the end of his incumbency at the helm of the ECB, and he’s not exactly receiving high fives on his way out the door.
The ECB left rates unchanged today, but instituted a bank refinancing program and restarted a covered bond purchase program in order to provide stability to shaky markets.
Consensus among investors and the financial news media is that the ECB should have hiked rates today, and will probably do so once Mario Draghi takes over in November.
Here are the most important things he said:
– He kicked off the meeting talking about inflation. Although he sees it falling after a few months, he said that inflation right now is high. It’s currently 3.1%for the eurozone, and Trichet said the ECB is focused on getting it back down to just under 2%.
– He announced a new bank refinancing program, meant to ensure bank liquidity in an environment of “particularly high uncertainty.”
– The ECB expects euro area growth to be very moderate, but emphasises that current rates are “accommodative.” Many analysts would disagree.
– Trichet suggested that not all ECB members got behind the decision to keep interest rates unchanged, though this was more of an implication than an outright admission of that fact. He said that the Governing Council did have a “long discussion” about rate cuts, however.
– He pointed the finger at EU governments for the eurozone crisis. He told reporters, “Governance has been insufficient,” and stressed that the ECB has had to fight to maintain financial stability.