UPDATE 1-Govt action has eased turmoil-ECB's Paramo

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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)