ECB governing council member Christian Noyer said on Friday that markets had overreacted to the prospect of reduced U.S. monetary stimulus, adding it was a sign that the economy was getting back on track. Noyer, who serves as head of the Bank of France, also said the French economy was showing signs of improvement but that he was not certain it would avoid recession this year. "In my view the reaction of the markets was excessive and I think things will get back to normal relatively quickly," Noyer told French news channel LCI. European stocks fell on Thursday after U.S. Federal Reserve Chairman Ben Bernanke confirmed the Fed would begin winding down its quantitative easing programme later this year, fuelling a worldwide selloff in stocks, fixed income and commodities. "Central banks will one day have to go back to more traditional, normal, monetary policy and this means that economies are getting back to normal," Noyer said. Asked to comment on the French economy, which is expected by the INSEE statistics office to shrink by 0.1 percent this year after posting zero growth last year, Noyer said he could see signs of improvement. "I am seeing the beginning of an upturn and an acceleration, a very slow one...It's going in the right direction," he said. But he added it was not yet certain that France would be able to avoid a recession in 2013. "We began the year negatively...What is important is if we end the year in positive territory." |
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