European Central Bank President Jean-Claude Trichet said Monday central banks most take into account the impact of interest rates and asset valuations on external imbalances. Trichet was speaking on the importance of economic research for central bankers at an economics award ceremony held at the Bank of Spain. Trichet said recent economic research has highlighted the limitations of traditional wisdom that said currency depreciations are necessary to correct current account deficits. "When variations of asset valuations occur, cross-border asset holdings introduce valuation impacts" that distort external imbalances, Trichet said. Trichet also reiterated the ECB's long-held position that analyzing money supply growth is key to "carrying out monetary policy and anchoring inflation expectations." Nonetheless, he said the ECB has always been open to debating new economic research on the impact of monetary policy on inflation.