ECONOMY | 17.08.2009

German Federal Bank President: Crisis not over yet

Weber has urged caution in declaring an end to the crisis

Germany's Federal Bank President Axel Weber, in an interview with a German newspaper, said that while the German economy may have bottomed out, it remains too early to declare an end to the financial crisis.

Weber's comments were on a par with remarks made by fellow European Central Bank Governing Council member Erkki Liikanen, who noted that financial markets are better now that they were before US investment bank Lehman Brothers collapsed.

"I warn against prematurely declaring the financial crisis to be over," Weber said in an interview with the Sueddeutsche Zeitung newspaper in Germany.

The German economy showed a bit of growth in the second quarter, expanding 0.3 percent, and surprising economists. It also boosted the hopes of a wider recovery in the euro zone.

Weber also said that concerns regarding the lack of credit available to small and medium sized businesses to help them recover faster were unfounded. He noted that companies with good credit ratings continued to have access to credit.

"There is no credit crunch," he said in the interview, and added that he was sure that commercial banks would listen to the ECB's call for continued active lending.

Finally, Weber said that the German economy may perform better as financial rescue packages start to take effect. He also said that it may be possible for him to revise the general forecast upward from the previously announced 6-percent contraction.

Responding to rumors that he was a candidate to replace ECB president Jean-Claude Trichet, Weber said that he currently had a very interesting job and that his priority was to concentrate on that.

av/Reuters/AP
Editor: Trinity Hartman

antigrafikon from DW.----kefalonia-kai-kosmos.