Bank of France governor Jean-Claude Trichet has been acquitted on charges of false accounting in a Paris court today. The verdict paves the way for the national central banker to succeed Wim Duisenberg as president of the European Central Bank. Trichet and eight other defendants were accused of helping to cover-up losses at the then state-owned Credit Lyonnais bank when it came close to collapse in 1993 by issuing false information on the financial health of the group. The euro held steady at USD1.710 after the verdict was announced this afernoon.
Analysts had predicted turbulent times for the euro had the court found Trichet guilty, as that verdict would have brought uncertainty as to who should succeed Duisenberg, and when. Currency markets were already jittery ahead of the verdict with the euro moving to the lower end of its recent trading range after dropping under USD1.18 yesterday. Duisenberg was originally due to retire on 9 July, mid way through his eight-year term, but has agreed to remain on at the ECB until his successor can take up the post. //www.fxcentre.com