8 next year against a previous projection of 0

The European Central Bank (ECB) confirmed yesterday that it would begin to withdraw its support measures for the banking sector, while ensuring that this action is not interpreted as the beginning of a monetary tightening cycle. "The improvement of conditions on financial markets indicates that all liquidity measures are as necessary", justified the President of the Institute of francfortois emission, Jean-Claude Trichet. The ECB will therefore put an end to a part of its long-term refinancing operations implemented after the first financial tensions in mid-2007 (see also below).

Despite any prudence which is surrounded by the ECB, tension on rates in the States of the euro area markets followed. Short rates are most sensitive to monetary policy decisions. At the end of day, the German "schatz" is thus tended more than 5 basis points to 1,295, while 2 years French was 3 points to 1,195. Nothing alarming. But just after the announcement, the movement was more pronounced signs that operators have been surprised. They expected not to what the output of the special device of crisis is also advanced.

Decision "by consensus".

The euro also responded to the ads, taking a bit of height. He approached his record of the year, raising to 1,5141 dollar at the meeting, despite support reaffirmed by Jean-Claude Trichet to a "strong dollar", he told to share with the US authorities. To move forward towards the exit, the ECB had to take a decision "by consensus", and not unanimously. This is a sign of differences of opinion. The members of the institution are shared between the fear that certain banks can not live without the aid and the risk of excessive liquidity source of speculative bubbles.

The ECB also showed better prospects for the European economy: GDP in the euro area should, in her view, advance of 0.8 next year, against a previous projection of 0.2 in September. But Jean-Claude Trichet remains cautious: "some factors supporting growth at the moment are temporary." The Governing Council expects moderate growth in 2010, recognising that the recovery process may be irregular and that the Outlook remains subject to uncertainty.

The output of the "non-conventional" measures announced so not necessarily a rise in interest rates next. "We do are not currently reporting anything in terms of monetary tightening, also insisted the President of the Central Bank." We consider the current level of rates as appropriate.

Inflation contained

It must be said that inflation forecasts suggest a leeway: the consumer price should increase by 1.3 in 2010 and 1.4 in 2011, which is well below the ECB's medium-term objective. Maintained at 1 yesterday, the main rate could stay at that level at least until Midyear 2010, as provided by Jörg Krämer, an economist at Com-merzbank: "the stock of bank credit to businesses and individuals have declined for the first time since the creation of Monetary Union." This should feed the concerns of the ECB on the sustainability of the recovery and the strength of the banking sector. Discussions on rate increases should not begin before the second half of 2010.

The policies of central banks were yesterday in the heart of the concerns of the market. Ben Bernanke, the pattern of the US Federal Reserve, was heard before the Senate Banking Committee. He had to defend his record and particularly to explain the risks of speculative bubbles linked to a policy of rate to 0 in the United States.