Paulson Discusses Currencies With Trichet

Treasury Secretary Henry Paulson said he discussed the situation of global currencies with European Central Bank President Jean-Claude Trichet.

Paulson

“We talked about currencies, not just the dollar and the euro, but currencies on a global basis, in Asia,” Paulson told a small group of journalists, but he declined to reveal details of the discussion.

He made the remarks following meetings with ECB President Jean-Claude Trichet and ECB council member and Deutsche Bundesbank President Axel Weber Tuesday. Paulson said his meeting with Trichet was private.

“Again, he is someone I’ve known for a long time, and we talk regularly on the phone,” Paulson said, noting that Trichet has just returned from the annual meeting of the Bank for International Settlements in Basel Monday.

Paulson said the topics of the meetings included economic issues in both the U.S. and Europe. “You can’t talk about economic issues without talking about inflation, and when you talk about inflation you are quickly talking about food and about oil,” Paulson added.

Paulson noted there was discussion about capital market regulation. “We talked a lot about capital markets, as I did with Axel Weber, talking about regulatory issues,” Paulson said. “We share common objectives.”

Paulson said there has been “real cooperation and real communication” on regulatory issues, noting both sides share information on what is going on in markets.

The ECB is expected to raise interest rates at a policy meeting Thursday, bringing the policy rate to 4.25% from 4.00%. Paulson declined to comment on monetary policy issues, adding “if there is one thing I respect, it’s an independent central bank setting policy.” –Monica Houston-Waesch