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More needs to be done to repair the global financial system after the crisis and there is a need for strict implementation of financial reforms, European Central Bank President Jean-Claude Trichet said Thursday.
"The agenda for financial reform recently agreed at the G-20 needs to be implemented decisively," Trichet said in Frankfurt. "The financial industry needs to change fundamentally."
He added that the financial industry needs to put more emphasis on robust business models, sound balance sheets and far better management of liquidity and risk.
Further, he said a survey conducted in June and July this year, participating more than 6,000 firms in the euro area found that firms were having difficulties in finding customers. In addition, their profits and turnover were falling and it was hard to get bank loans. The survey also indicated that the crisis has been at least as severe for small and medium sized firms as for larger ones.
Trichet noted that the ECB is closely monitoring the access to finance of small and medium-sized enterprises and will repeat the survey every six months so as to ensure that the business conditions faced by companies are monitored continuously.
Repeating the statements made earlier, Trichet said the ECB have designed its non-standard measures with an exit strategy in mind. It is still premature to declare the financial crisis to be over. But when the appropriate time comes, there should not be any concern about the ECB's ability to exit.
Indeed, most of its non-standard measures will be phased out naturally, the central bank chief said. Furthermore, the ECB has a clearly defined mandate and complete independence, which ensure that we can act when we believe it to be appropriate.
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