Upswing in world economy
The world’s top central bankers are buoyant, claiming the global economy has returned to growth.
At the end of a meeting of the G10 group of central bank chiefs, the president of the European Central Bank, Jean-Claude Trichet, said the recovery could be seen in every region.
“The current growth trend can be observed in all regions of the world and it seems strong,” Trichet said.
He told journalists the low level of long-term government bond rates also confirmed the worldwide economic recovery.
Caution
“We have to remain vigilant so that this strong recovery is sustainable over the long run,” Trichet cautioned.
The European central banker, whose own currency, the euro, is under pressure from the weakening dollar, also warned that “brutal moves” in currency markets were neither welcome nor appropriate.
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“The current growth trend can be observed in all regions of the world and it seems strong” Jean-Claude Trichet President, European Central Bank |
Trichet’s comments followed a regular meeting of the central banks at the Bank for International Settlements in Basel.
The central bankers discussed labour productivity and the need to boost weaker economies during their meeting.
But they did not broach the contentious issue of the US current account deficit.
China
China’s moves to reform its commercial banking sector also came under scrutiny, but there was no discussion of a need for more flexibility in Chinese exchange rate systems, Trichet said.
The Chinese government announced it would pump about $40 billion into the country’s biggest commercial bank, Industrial and Commercial Bank of China, in the latest of a series of moves to bail out its debt-ridden banking sector.
China last week had unveiled a pilot scheme to modernize two of the country’s largest banks, using $45 billion of the country’s foreign exchange reserves.
The G10 includes eleven countries: Belgium, UK, Canada, France, Germany, Italy, Japan, the Netherlands, Sweden, Switzerland and the United States.