benoit cœure : interview with cnbc interview with mr benoit cœure, member of the executive board of the european central bank, and cnbc, conducted by mr steve sedgwick on 6 april 2018. * * * you've been talking about trade and that is the key topic here in cernobbio and indeed globally at the moment as well. what's your contribution this morning on this topic? the point i was making this morning at the conference is that first we're not sure yet that we're in a trade war. as much as possible, if we could avoid the bellicose semantics and come back to a reasonable discussion, that would help for economic confidence. that also means that if this would morph into a full - fledged trade war, this has the potential to have quite damaging consequences for growth and jobs globally, including in the us. is it already having ramifications in global financial markets? we've seen the volatility and equity markets. we've seen higher borrowing costs as well. it looks like it's already having the effects of a trade war without being a trade war yet. to some extent, yes, we've seen that. we've seen obviously stock prices going down, some risk premia are going up, so some tightening of financial conditions globally starting with the us. but it all depends on how the situation will evolve. certainly what we don't want to see is a general tightening of financial conditions. in terms of the effect it's going to have on rate raising on both sides of the atlantic, what do you see as the ramifications for interest rate policy first perhaps for federal reserve and then for the ecb? for the federal reserve i wouldn't dare comment. i don't think they would like it too much and it's not my job. as far as the eurozone is concerned, so far i would say we can look through. it all comes against a backdrop of a very strong growth momentum, very broad. this recovery, this expansion is the strongest we had for at least 10 years. in terms of its breadth across the board, across sectors, across economies, that's the broadest we had for the last 20 years, i would say. the starting point is a very good one and the economy is quite resilient. there are two reasons why bonds go up, why yields go up or the rates on

a political flux and that's clearly not our role to step into that. apart from trade and your desire to see greater productivity reform, structural reforms, 2 / 3 bis central bankers'speeches fiscal buffers as well, what are the other issues that you have greatest concern about at the moment in global markets, global economy? trade – as we just discussed – is clearly top of the agenda. that's the biggest concern we have today. and brexit? brexit is a concern but there is a political negotiation and the ecb is not part of this political negotiation. we very much hope that this can be settled in a way that makes it smooth, that does not harm confidence. but we also trust that it can be settled in a way that preserves the integrity of the european project in terms of the four freedoms, in terms of the single market, in terms of having effective ways to regulate our financial industry and to supervise our financial industry to achieve stability in europe. a huge part of the eu financial industry is based in the united kingdom, the fundraising for the broader eu is based in many ways in the united kingdom. the clearing, the forex, the bond trading as well. if that is taken away or the access for those markets is taken away, that leaves a huge black hole for countries like germany, for ireland, for countries that actually feel that they could fill that gap. they can't necessarily, can they? any such movement has to be decided by the industry. it has to be led by the market. what we want to see as a central bank, what we want to see as overseer, as supervisor is that effective supervision continues to be delivered wherever the financial industry is located. location choices should be for the industry to make themselves. you have no doubt, regardless of the final status of the relationship between the united kingdom and europe, that your relationship with the regulators, with mr carney and what have you, will be exactly the same as it is now? what i can say at the current juncture is that our relationship with the bank of england is one of the main assets we have. we have a trust relationship with the bank of england and that will be a very strong asset for the future. 3 / 3 bis central bankers'speeches