European Central Bank President Jean-Claude Trichet Wednesday urged European financial regulators to cooperate more closely with central banks to prevent future crises and reinforce market transparency.
However, Trichet, who was speaking at the Paris Europlace financial forum, declined to make monetary policy comments ahead of the ECB meeting Thursday, when the central bank is widely expected to raise rates.
"Closer ongoing cooperation should be pursued not only between supervisors, but also between supervisors and central banks... This would make a significant contribution to raising awareness of emerging financial system imbalances at an earlier stage and devising effectively coordinated public sector action to address them," Trichet said.
He also stressed that prudent liquidity risk management on the part of financial institutions would help to prevent moral hazards and excessive reliance from market participants on central banks to solve financial crises.
-By Gabriele Parussini and Nathalie Boschat, Dow Jones Newswires; +33 1 40171740; gabriele.parussini@dowjones.com, nathalie.boschat@dowjones.com;
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