, FRANKFURT, Jan 27 – European Central Bank President Jean-Claude Trichet has offered support for a US plan to limit the size and scope of large banks but stressed the need for global coordination, a report said Wednesday.
Trichet also urged US lawmakers to confirm Ben Bernanke for another term as Federal Reserve chairman, the Wall Street Journal reported.
Bank-reform plans outlined by the White House last week "go in the same direction of our own position, namely ensuring that the banking sector focuses on financing the real economy", Trichet told the newspaper.
Under US President Barack Obama\’s plan, limits would be placed on the market share of the largest US financial firms and proprietary trading by banks restricted.
European countries including Germany and France have pushed for international consensus on a new regulatory framework for the banking system.
The ECB was "examining (the Obama proposals) with great care," Trichet said according to the report, amid concerns over whether influential eurozone members Germany and France would approve measures that would limit their own banks, Deutsche Bank AG and BNP Paribas SA.
Trichet, who arrives Wednesday for the World Economic Forum in Davos, Switzerland, also called on bankers to remember their role in the biggest financial crisis since the Great Depression, the report said.
Some at financial institutions see a return to normalcy "and have forgotten that governments put over 25 percent of GDP of taxpayer risks on the table", Trichet said.
Bank balance sheets need to be restored by issuing new shares when possible and compensation practices fixed so the financial sector can "do its job, which is financing appropriately the real economy", he said.