EUROPEAN CENTRAL Bank president Jean-Claude Trichet has said limiting inflation is the key to maintaining confidence, and he ruled out changing the bank’s price-stability gauge to allow the economy to recover more quickly.

Central bankers “are there to deliver price stability in the medium term. It’s a crucial element in confidence,” Mr Trichet told reporters in Rome over the weekend after a biannual meeting of a panel of economists and policy makers called the Group of 30.

“It’s absolutely out of the question to change anything in the definition of price stability.”

Mr Trichet responded to a question about whether raising the ECB’s inflation ceiling – now at slightly less than 2 per cent – would accelerate an economic recovery and allow governments to pay debt more quickly.

He said the recession in the industrial world was slowing and may reverse next year.

“The emerging world perhaps could see something more rapid in terms of an economic recovery”, Mr Trichet said.

Singapore finance minister Tharman Shanmugaratnam said that while growth may bounce back faster in the emerging world, it would not return to pre-crisis levels right away.

“For a few years we are very likely to have a lower-than-trend growth,” Mr Shanmugaratnam said during the same press conference.

“All we know is the worst might be past us, but it is too early to say that the recovery is on the way.”

ECB council member Mario Draghi, the governor of the Italian central bank who heads the financial stability board that is charged with drafting new rules of international supervision, said that salaries may become the object of oversight, repeating a statement made at a meeting in London in April.

“Compensation may become a matter for supervision,” Mr Draghi said. – (Bloomberg)