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Trichet: Europe's debt crisis warning

Tuesday, October 11, 2011 - 01:47

Oct. 11 - Trichet says the EU sovereign debt crisis has become systemic, risks of contagion are rising and that effects of crisis will be felt far beyond Europe. Sonia Legg reports

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There was nothing ambiguous about this warning from Europe's top financial watchdog. (SOUNDBITE)(English) EUROPEAN SYSTEMIC RISK BOARD CHAIRMAN AND HEAD OF EUROPEAN CENTRAL BANK JEAN-CLAUDE TRICHET SAYING: "The crisis is systemic and must be tackled decisively, national governments and authorities as well as European institutions must rise to the challenge and act together swiftly." Jean-Claude Trichet is best known as President of the ECB but he's also chairman of the European Systemic Risk Board. It was set up to avoid a repeat of the 2008 financial crisis. His dramatic message suggests that's proving increasingly difficult. (SOUNDBITE)(English) EUROPEAN SYSTEMIC RISK BOARD CHAIRMAN AND HEAD OF EUROPEAN CENTRAL BANK JEAN-CLAUDE TRICHET SAYING: "The high interconnectedness in the EU financial system has led to a rapidly rising risk of significant contagion. This threatens financial stability in the EU as a whole and adversely impacts the real economy in Europe and beyond." Greece is widely expected to default on its massive debt and EU leaders say they'll agree a deal to tackle the crisis within two weeks. Trichet's comments are likely to increase the pressure they are under. (SOUNDBITE)(English) EUROPEAN SYSTEMIC RISK BOARD CHAIRMAN AND HEAD OF EUROPEAN CENTRAL BANK JEAN-CLAUDE TRICHET SAYING: "I stress once again that it is a matter of urgency that all authorities act in unison, with total commitment to safeguarding financial stability." As Trichet spoke Slovakia was voting on the expansion of the euro zone rescue fund. Banking regulators were also asking lenders across Europe for updated information about their capital positions and their sovereign debt exposure. The moves made investors nervous once again - hitting European shares and the euro. Sonia Legg, Reuters.

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Trichet: Europe's debt crisis warning

Tuesday, October 11, 2011 - 01:47