Major central banks are satisfied with their joint efforts to tame the money markets following the US subprime mortgage meltdown. So says ECB President Jean-Claude Trichet as he summed up talks among officials from the Group of Ten leading economies. Trichet said global economic growth is expected to remain quite robust despite the market turmoil and high commodity prices.
The Organisation for Economic Cooperation and Development estimates bank losses from subprime debt will reach 215 billion euros. To boost liquidity, the central banks have put up 410 billion euros.
As a result of the central banks action, the cost of borrowing between banks have fallen, but with the US property market still in the doldrums it is not clear if policymakers will have to pump in more.
Trichet would not commit himself on that he said only that the banks remain in very close. He added that market participants had to do their part as well.