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Trichet Exclusive: Basel Accord, Greece

Details of the Basel Accord may be out as early as mid-September. Important meetings will be held in the next few days.

Jean-Claude Trichet
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Jean-Claude Trichet

Maria Bartiromo spoke exclusive with European Central Bank President, Jean-Claude Trichetabout the Basel Accord, what Trichet call “a work in progress.”

Trichet said, “We went through the worst crisis since World War II. Had we not acted so resolutely on both sides of the Atlantic and on both sides of the Channel, and everywhere in the world, we would have had the worst depression since World War I. We could avoid that in putting on the table on both sides of the Atlantic 27% of our GDP in taxpayer risk. Very remarkably at the same percentage, of course it was not utilized at the level of 27%, it was not a loss, it was not spending, but it was a risk and we had to take those decisions. We won’t do that twice so there is an obligation that what will come out of the Basel III exercise and all the rest of the G20 endeavors, we have to be sure that the global system will be much more resilient. It is a must.”

Are banks well capitalized?

In the medium term Trichet told Bartiromo “it has to be reinforced. And one of the decisions which would be very important is how to organize the transition from the present situation to a situation where we would be fully confident that the system is much more resilient but of course taking into account the necessary transition.”

Greece Stays in the Euro

When it came to Greece and its debt crisis, Trichet maintained, there’s “no probability” that Greece will get kicked out of the Euro.

Importance of Emerging Markets

When it comes to the emerging markets, Trichet believes the growth story we are seeing there is “extremely important.”

We are relying very much at the global level on the capacity of these emerging countries to continue to develop as they are doing, they did during the last period of time. They helped us considerably to surmount part of the difficulty of the recent period and again, in intimate cooperation between the full body of the systemic economies of the world whether advanced or emerging is absolutely,” Trichet said.

Watch the entire interview on Closing Bell this afternoon at 4:15PM ET.

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