Japan Crisis Won't Derail ECB Rate Plans: Official
Assistant Editor, CNBC.com
The crisis in Japan following the devastating earthquake and tsunami that killed thousands of people will not have an effect on the European Central Bank's interest-rate policy, Manfred Schepers, vice-president finance and chief financial officer for the European Bank for Reconstruction and Development, told CNBC.
“What’s happened in Japan has been a horrendous event… (but) I don’t see a direct link between that and the policy of the ECB,” Schepers told CNBC on the sidelines of the "Future of Banking" conference organized by The Economist in Paris.
Markets have reacted positively after ECB President Jean-Claude Trichet said earlier this month that central bank might start raising its benchmark rate as soon as April.
This was before a 9.0-magnitude earthquake and a tsunami hit the Northern coast of Japan and heavily affected the country’s economy.
“We are already seeing stabilization of the Japanese stock market, we have seen a stabilization of the Japanese yen,” Schepers added, “we are already talking about the positive impact of the reconstruction.” Last week, Bob Parker, Senior Advisor at Credit Suisse told CNBC he thought the disaster "pushes back any interest rate increase in the ECB,” a position shared by many experts.
However, according to Schepers, Japan will not be a criterion in Trichet’s decision making.
“The trend of inflation across Europe will need to be carefully analyzed,” Schepers said, adding that the decision to abandon ECB’s record low interest rate “will be taken at a time when the impact can uniformly be absorbed across the euro zone… in relation to the challenges seen by the European sovereign debt market and the stability that we need.”
- Stéphane Pedrazzi, CNBC correspondent in Paris, contributed to this report