FRANKFURT, Nov 21 (Reuters) - Government action to curb
market turmoil has shown some positive impact but conditions
remain far from normal, European Central Bank Executive Board
member Jose Manuel Gonzalez-Paramo said on Friday.
"It is too early to tell the effect of the latest
initiatives by public authorities, but there are some positive
signs," said Gonzalez Paramo, according to the text of a speech
in Madrid on the financial crisis distributed by the ECB.
Since market turmoil intensified in September, governments
have pooled efforts to boost bank liquidity and capital and
raise financial system transparency.
Coordinated actions have led to significant falls in premia
on banks' CDS contracts as well as in money market rates while
spreads have narrowed and money market volumes have increased,
Gonzalez Paramo said.
"Despite these improvements, the situation remains far from
normal," he added.
Gonzalez Paramo said the ECB very much looked forward to the
resumption of interbank lending to ease market tension.
He said the ECB would continue to provide liquidity as
needed to ease tensions.
(Reporting by Krista Hughes; Writing by Andrew Hay; Editing by
Ron Askew)
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