Trichet Sees Return to Normalcy
As ECB Injects More Funds
Major Asian Central Banks
Drain Cash From Markets
By JOELLEN PERRY and ARRAN SCOTT
August 14, 2007 9:14 a.m.
Euro-zone money market conditions have "progressively gone back to normal," European Central Bank President Jean-Claude Trichet said. The ECB earlier offered the euro-zone money market short-term cash for the fourth day running, but the amount of cash the bank pumped into the market fell far below recent days' highs.
"As I did after our last meeting [Aug. 2] I call on all parties to keep their composure," Mr. Trichet said in a statement, adding that this attitude has been "welcome and effective" in recent days. Mr. Trichet noted that recent market "nervousness" has brought about a significant re-appreciation of risk.
"In some respects, what has been observed can be interpreted as a normalization of the pricing of risk," Mr. Trichet said. (Read the statement.)
The ECB's move came as the Bank of Japan and the Reserve Bank of Australia drained cash from financial markets, signaling a return to business as usual for the first time since market turmoil spurred global monetary authorities into crisis mode last week.
The ECB injected |