31 May 2001, 12:45 ECB's Duisenberg reiterates focus on inflation
VIENNA (AFX) - European Central Bank president Wim Duisenberg
reiterated the bank's focus on inflation to ensure the smooth
functioning of financial markets and to boost euro zone economic growth
and employment.
Speaking at a conference organised by the Oestereichische
Nationalbank, he emphasised the need to maintain a steady medium-term
price stability orientation.
"The ECB is convinced that by rigorously fulfilling this mandate,
monetary policy is making its most effective contribution to the
realisation of strong output growth and satisfactory employment
prospects," Duisenberg said.
The bank took financial markets by surprise on May 10 by cutting
interest rates by 25 basis points despite rising euro zone inflation.
Against a backdrop of flagging growth, the euro has fallen steadily
since then on fears of stagflation.
Duisenberg also called for a greater role for national central
banks in banking supervision with the advent of the single currency.
"My conclusion is that the successful pursuance of financial
stability in Europe, which is a prerequisite for economic growth, could
benefit considerably if NCBs maintain and even reinforce their role in
prudential supervision," he said.
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