page_title: Jean-Claude Trichet
section_title: 2009 banking crisis
hierarchical_section_title: Jean-Claude Trichet / 2009 banking crisis
caption_attribution_description: DAVOS/SWITZERLAND, 29JAN10 - Jean-Claude Trichet, President, European Central Bank, Frankfurt, speaks during the session 'Rethinking Government Assistance' in the Congress Centre of the Annual Meeting 2010 of the World Economic Forum in Davos, Switzerland, January 29, 2010. Copyright by World Economic Forum. swiss-image.ch/Photo by Remy Steinegger.
context_page_description: Jean-Claude Trichet is a French economist who served as President of the European Central Bank from 2003 to 2011. Previous to his assumption of the presidency he served as Governor of the Bank of France from 1993 to 2003 under presidents François Mitterrand and Jacques Chirac.
  After stepping down from the European Central Bank, Trichet has taken speaking arrangements across France and served on the Board of Directors of the Bank for International Settlements. He was asked to join the non-doctrinal think tank, Bruegel, to consult on economic policy. In 2008, Trichet ranked fifth on Newsweek's list of the world's most powerful along with economic triumvirs Ben Bernanke and Masaaki Shirakawa.
context_section_description: Within the European Central Bank, Trichet strongly resisted any contemplation of Greece defaulting on its debt. It was only in October 2011, with the end of his term imminent, that consensus was reached to allow a 50% cut in the value of Greek bonds.
  Former Minister for Finance Brian Lenihan had "a loaded gun pointed in his ear" when it came to the ECB letter sent to the Irish Government in 2010, a leading economist has said. Chief Economist of the world's largest bond trading firm Pimco, Paul McCulley said the late Minister for Finance had "very little choice" when it came to the ECB's letter to the Irish Government. The secret letter, sent on 19 November 2010, threatened to cut off all funding, unless Ireland immediately applied for a bailout.
  The letter was sent by then ECB President Jean Claude Trichet to the former Minister for Finance Brian Lenihan.
  The letter was sent on 19 November 2010, stating that the Governing Council of the Bank could only authorise further liquidity funding assistance (ELA) to Irish banks if it received a commitment in writing from the Irish Government it would send a request for financial support to the Euro group.
  Speaking on Morning Ireland today, Pimco Economist Paul McCulley said that while most people had speculated what was in the letter, to actually see the contents was shocking: "To see it in black and white was nothing more than a firearm stuck in the ear [of the Government]. He said the former Minister for Finance had no options when it came to the ECB threats in the letter.
  "You do whatever you do when you have a gun in your ear – you hand over your wallet. You are not suppose [sic] to feel good about it. But it is the logical and rational thing to do at that moment.
  "After that moment passes, you had redress from the standpoint of 'I really don’t like the idea of having a firearm stuck in my ear". Six years later, we are now seeing a picture of the firearm emerging. I assume there is a fair amount of indignation in this country.
  Speaking on Morning Ireland, Mr McCully said he couldn't guess if the ECB was bluffing.
  "It is hard to know if they were bluffing because they no choice. Again my analogy of having a firearm in the ear is a fair one. The gun may have an empty gun but do you want to bet on it?”
  He said that Ireland's debt should be "extended, modified and rolled so as to soften the blow of it".
  It is understood there are three other letters in the correspondence between Jean Claude Trichet and Brian Lenihan in October 2010 and November 2010. The Governing Council of the European Central Bank is meeting today and the potential release of the letters is expected to be on the agenda.
  On 5 August 2011 he wrote, together with Mario Draghi, a letter to the Italian government to push for a series of economic measures that would soon be implemented in Italy.
caption: Trichet during the WEF 2010
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