New G3 club. (Off The News).

With the recent court acquittal of Bank of France Governor Jean-Claude Trichet, international markets have begun wargaming the kind of role Trichet will play as president of the European Central Bank. The answer is that Trichet is likely to be far more internationally sensitive than his predecessor, Wim Duisenberg. For years during various gatherings of international policymakers such as the BIS, the G8, etc., Trichet has made it a point to meet for frank private discussions with Federal Reserve Chairman Alan Greenspan and Bank of Japan Governor Toshihiko Fukui. Together, these three are said to have established a close-knit informal discussion club with exchanges significantly more straightforward than those taking place during official meetings. That is why with the emergence of Trichet, international policy coordination could gain more credibility. Note that one point of agreement reached by this three-member team earlier this year was that the ECB desperately needed to lower short-term interest rates.