ECB head: a turning point could be near

PanARMENIAN.Net - The head of the European Central Bank and some other central bankers said the world's economy is still slowing but suggested a turning point could be near as massive fiscal-stimulus packages, low interest rates and cheaper energy prices bolster prospects for growth, The Wall Street Journal reports.



"We're approaching a moment where we might have a pickup," said European Central Bank President Jean-Claude Trichet in his most optimistic assessment to date of tentative signs of stabilization in some markets. He cited a modest rebound in corporate-bond markets as one positive sign. He spoke to reporters on behalf of participants in a meeting of

central bankers from the world's leading economies at the Bank for International Settlements in Basel, Switzerland.



The ECB expects little recovery until 2011, with its central forecast at 0 percent growth next year.



Mr. Trichet also suggested that investors, who last week drove major U.S. stock indexes to 12-year lows, are underestimating the significance of government efforts. Policy makers world-wide have made "a very, very

strong commitment ... not to let any systemic institution go under," Mr. Trichet said. This "may not be fully priced in by the market."



The Trichet view isn't shared uniformly among central bankers. Federal Reserve officials have been struck in recent weeks by the sharp deterioration in stock prices.



Falling stock prices make it harder for banks to raise private capital. Moreover, some credit-market conditions, which had shown signs of improvement earlier this year, have worsened a bit amid a stream of dour economic data.



Economic policy makers from around the world are jockeying for position ahead of a gathering of finance ministers and central bankers from the Group of 20 nations this weekend in preparation for a summit of G-20 leaders on April 2. The U.S. is pressing for more aggressive government spending to lift the global economy; others seek to use the meetings to

restructure global financial regulation.