ECB chief warns strong dollar needed for stable growth

GOTHENBURG (AFP): The head of the European Central Bank has warned that large currency fluctuations could derail economic revival, the latest in a series of remarks urging the return of a strong dollar. “As I see the situation, there is a very strong sentiment that we have a shared interest in a strong and stable international financial system,” Jean-Claude Trichet told reporters in Sweden. “Excessive volatility and disorderly movement in exchange rates has adverse implications for economic and financial stability,” Trichet added. Recently the euro single currency hit its highest levels for a year against the dollar. Washington is suspected in Europe of having allowed the dollar to fall over the past 12 months to help re-boot its economy amid recession, while Europe fears a strong euro would hit its exports.


Special prosecutor raids accounting firms in Iceland

REYKJAVIK (AFP): Iceland’s special prosecutor raided the offices of accounting firms PriceWaterhouseCoopers and KPMG and seized accounting data for the country’s three biggest failed banks, his office said. “The purpose of the house search was to seek and possess evidence for the investigation of several charges which have been investigated by the office,” a statement from special prosecutor Olafur Hauksson said. Iceland’s once-booming financial sector – including its three biggest banks Kaupthing, Landsbanki and Glitnir – collapsed last year amid the global credit crisis, forcing the government to take over the banks. The economic crisis has plunged the country into a deep recession. Thousands of Icelanders lost their savings and their jobs, and the then-government later resigned amid popular anger.