By Maya Jackson Randall Of DOW JONES NEWSWIRES
JACKSON HOLE, Wyo. -(Dow Jones)- Policy makers around the world must keep up efforts to stem the global crisis - despite signs that the global recession is easing, European Central Bank President Jean-Claude Trichet said Saturday.
In a broad speech to international finance officials, Trichet said finance officials must not get complacent. They need to do all they can to prevent another crisis and sustain recovery, he said.
"This is the very demanding, immediate task of the international community," said Trichet. "And now that we see some signs confirming that the real economy is starting to get out of the period of 'free fall' - which does not mean at all that we do not have a very bumpy road ahead of us - the largest mistake we could make would be to forget the importance and the urgency of this task."
Trichet spoke on a panel during an annual economics conference that has once again attracted central bankers and academics from around the world to Jackson Hole, Wyo.
Trichet also touted monetary policy in Europe as being steady-handed in the face of financial shocks.
"The ECB has acquired a reputation for moving interest rates in a steady and persistent fashion over time," he said. "This is a conscious choice."
Additionally, he weighed in on the issue of whether central banks should respond to asset price bubbles. Trichet argued that there's value in policies that identify financial imbalances and assess the risk of any misaligned pricing of risk. Waiting for an asset bubble to burst and then easing monetary policy creates a moral hazard issue, said Trichet.
Meanwhile, Trichet argued that the current crisis would be worse had central banks not collaborated on efforts to ease the turmoil.
"Without such trustful cooperation, global events could have been much more dramatic," he said.
- Maya Jackson Randall maya.jackson-randall@dowjones.com. 202-862-255
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