Asian actors play greater role globally: ECB chief
Thursday, 28 February 2008

Agence France-Presse . Frankfurt

European Central Bank president Jean-Claude Trichet says new players in the Asia-Pacific region are gaining strength in the world economy and are assuming more responsibilities in the global arena.

In a speech late on Monday to the German-Asian Business Circle, Trichet said: 'New players in the Asia-Pacific region are gaining in importance and reaching out to more established players.

'This means that they also have more responsibilities in the global arena and that the rules of the game need to adapt in order to keep pace,' he added.

Trichet said that this development was one reason why global governance of macroeconomic and financial matters was changing in terms of both format and substance.

The ECB chief also said 'the world economy might be better able to rely on the dynamism of the Asia-Pacific region should growth in other regions lose some momentum.' Eurozone exporters have managed to partly offset weaker trade with the United States by strengthening ties to Asia, Eastern Europe and the Middle East.

Trichet said that since all economies were interdependent, 'the key question therefore is to assess how, and to what extent, a possible slowing down in some mature economies might be partially offset by stronger growth in other regions, notably in emerging Asia.'

Commenting on international financial market turbulence, Trichet said a 'good analysis and a pertinent diagnosis' of the global situation were needed for any future market corrections to be 'as smooth and as orderly as possible.' He added however that these were 'not sufficient conditions per se' as demonstrated by current chronic market turbulence.

'That is the reason why it is so important, so decisive that we draw all the lessons from the present episode, across the board, without any prejudices, without giving any privilege of untouchability to any part and parcel of global finance,' the European central banker added.

Even if an accurate diagnosis of the problems is made and the private sector improves benchmark voluntary principles and codes of conduct, Trichet said more turmoil could lie ahead.

'My understanding is that we could not ensure that the 'unavoidable and necessary market corrections' of the future will be reasonably 'smooth and orderly', he said.'

He argued for greater transparency to avoid contagion and herd behaviour and for a 'holistic' approach to global financial management.

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