ECB’s Praet Says Trust in Currency Can ’Quickly Evaporate’

European Central Bank Executive Board member Peter Praet said a currency can’t function without trust.

“We have to draw the lessons of history,” he said today in a speech in Frankfurt. “Trust in a currency can quickly evaporate.”

In a crisis situation a central bank mandated to ensure price stability has to “promptly and decisively resist the shortage of liquidity,” he said. “An expanded central bank liquidity buffer is non-inflationary under these conditions.”

To contact the reporters on this story: Stefan Riecher in Frankfurt at sriecher@bloomberg.net; Jeff Black in Frankfurt at jblack25@bloomberg.net

To contact the editor responsible for this story: Craig Stirling at cstirling1@bloomberg.net

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