Wall Street Journal
October 12, 2011
European Central Bank President Jean-Claude Trichet warned Tuesday that the euro-zone crisis has "reached a systemic dimension" and said governments must swiftly push through fiscal reforms and coordinate a recapitalization of banks.
"We are at the epicenter of a global crisis," Mr. Trichet said in Brussels, speaking in his role as chair of the European Systemic Risk Board, a European Union institution responsible for limiting systemic risks to the euro zone's financial system.
Mr. Trichet said the sovereign-debt crisis has spread to the banking sector as well as "to some of the larger EU countries," and warned of "a rapidly rising risk of significant contagion that threatens financial stability in the EU."
The comments mark an escalation in Mr. Trichet's diagnosis of the crisis. At the ECB's press conference in September, Mr. Trichet warned against dramatizing the situation in the banking sector, although he has since struck a more concerned tone.
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