I shall not go into this work in any great depth here. Instead, I will discuss some factors that could contribute to strengthening movements on the financial markets in an unhealthy manner, and where we need to find other solutions to improve the functioning of the markets. These factors can also be more directly connected with mutual fund investment. Short-term evaluation and “follow the leader” behaviour The first thing that comes to mind here is the way many of the operations on the financial markets are evaluated. All too often the focus is on the short-term result. This applies in particular to the evaluation of various securities funds. Although many of you manage long-term savings that people intend to live on after retirement, you are nevertheless evaluated on the results you have achieved over the past year, the past few months or even the past few days. We have all seen the newspaper headlines declaring the winners and losers in mutual fund investment. Media coverage of developments on the financial markets certainly plays an important role for the transparency of these markets, but the focus on short-term results can create a vicious circle where investors and companies are constantly chasing the best possible result in the short term, despite the fact that this is not a good long-term strategy. Such behaviour can reinforce financial crises; for instance, through a fund manager not being given scope to wait until the crisis has abated, which could be rational in a long-term perspective.
DIE ZEIT: Last week the French secretary of state for European Affairs said in an interview that the Eurogroup - the 13 Finance ministers of the euro area - should be allowed to influence the ECB decisions. You reacted sharply. Trichet: I made the point that what was said was contrary to what the Treaty very explicitly says. BIS Review 85/2007  1  DIE ZEIT: The French intend to strengthen the political influence of the Eurogroup as a counter-weight to the ECB. That makes sense. Each other currency area in the world has one central bank and one Treasury. Trichet: It's a cliché that France is always heading towards a loose monetary policy. Since the creation of the Franc after the revolution, the monetary policy had the very strong tradition of a currency keeping well its value over time. Only during two periods of a little more than ten years over two centuries - after the Second World War up to De Gaulle became President and in the Seventies - the French monetary policy has been loose, but it is not the French culture. From 1994 up to the implementation of euro in 1999, we achieved a lower inflation rate than the Bundesbank. And we were supported by the French people. DIE ZEIT: But today the French government wants a co-ordination between the Eurogroup and the ECB. Trichet: The Treaty organises the relationship between the central bank and the executive branches extremely well.