Ex-ECB Trichet: 'No Element of Contagion' From Cyprus Crisis

By Chester Yung

Former European Central Bank President Jean-Claude Trichet said Wednesday there is no risk of wider contagion from Cyprus' banking crisis.

Speaking at a Credit Suisse conference in Hong Kong, Mr. Trichet said Europe stands ready to help Cyprus bail out its banks. The Cypriot Parliament on Tuesday rejected a controversial plan to impose a levy on depositors' bank savings, sending authorities back to the drawing board for a solution to the island's banking-system crisis.

Mr. Trichet, the honorary governor of the Bank of France, said Cyprus's case is extraordinary because the balance sheets of the island's banks is seven times as large as the country's gross domestic product, a risk not mirrored elsewhere in the European Union.

Write to Chester Yung at chester.yung@wsj.com

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