European Central Bank president Jean-Claude Trichet called on Sunday for industrial nations to work further to strengthen the global financial system, saying it would be "gigantic foolishness" to grow complacent.
Dangers and risks were still lurking even though central banks and governments had made difficult decisions in the wake of the financial crisis, Trichet said in an interview with the Weser-Kurier newspaper in Bremen to appear on Monday.
"We cannot afford to be complacent," he said. "We were able to avoid a disaster that would have been worse than in the 30s.
"To continue on as before would be gigantic foolishness. I won't accept the argument we should return to 'business as usual'. We know how vulnerable the financial system was and we've got to do everything to strengthen this fragile system so that such an event can be prevented in the future."
Trichet told the newspaper that in the eurozone it was important to improve financial policy co-ordination. He said he supported ideas from French President Nicolas Sarkozy and German Chancellor Angela Merkel for greater policy co-ordination and surveillance. "The monetary union that the euro is based upon functions well," he said. "The currency has credibility and it's been proven that it ensures price stability. Now it's time for the economic union to function as well. That wasn't the case in the past.
"That's why we've got to strengthen the surveillance of economic policies," he said. Trichet noted that the annual inflation rate in Germany was on average 1.5 percent in the last 12 years. That was better than in the 50 years before the euro was launched and also better than the average in the eurozone. "Obviously we didn't have any control in the past over surges in oil prices and other raw materials," he said. "But peolpe can be sure that we will do everything in the future to prevent a second-round effect after external shocks and thus ensure middle-term price stability."
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