Draghi over-interpreted on bond buys, says Trichet
By Paul Carrel
FRANKFURT (Reuters) - Markets have over-interpreted comments by incoming European Central Bank chief Mario Draghi on the bank's readiness to go on buying the bonds of troubled euro zone states, outgoing ECB President Jean-Claude Trichet said.
In a wide-ranging interview at the end of his eight-year term, Trichet welcomed what he saw as a commitment by euro zone governments at a summit last week to intervene in bond markets via the EFSF rescue fund to fight the bloc's debt crisis.
The ECB embarked on its own bond-buying program in May of last year but the plan has proven controversial, leading to the resignation of two leading German policymakers at the bank, and Trichet has appeared keen to withdraw from the policy.
Draghi seemed to take a different stance last week, appearing to signal that the ECB stood ready to go on buying bonds, intervening in debt markets to lower the borrowing costs of countries snared by the crisis.
Trichet said too much had been read into Draghi's comments.
"I don't think that Mr Draghi said that," he said of the message understood by financial markets that the ECB would go on buying bonds.
"I think there has been an over-interpretation," he added, looking out from the 32nd floor of the ECB's Frankfurt headquarters.
The confusion over Draghi's message highlights the importance of communicating ECB policy -- an area where Trichet has largely succeeded, delivering a clean, consistent message that has endeared him to financial markets. Continued...