MARKETS have over-interpreted comments by incoming European Central Bank chief Mario Draghi on the bank’s readiness to go on buying the bonds of troubled Eurozone states, Jean-Claude Trichet, the outgoing ECB president said yesterday.
Trichet’s comments came as he hands over the reins to his Italian successor, who will inherit the task of resolving the Eurozone’s biggest-ever crisis.
In a wide-ranging interview at the end of his eight-year term, Trichet welcomed what he saw as a commitment by Eurozone governments at a summit last week to intervene in bond markets via the EFSF rescue fund to fight the bloc’s debt crisis.
The ECB embarked on its own bond-buying programme in May of last year but the plan has proven controversial, leading to the resignation of two leading German policymakers at the bank, and Trichet has appeared keen to withdraw from the policy.
Draghi seemed to take a different stance last week, appearing to signal that the ECB stood ready to go on buying bonds, intervening in debt markets to lower the borrowing costs of countries snared by the crisis.
Trichet said too much had been read into Draghi’s comments.