ECB's Rehn: Market turbulence was an overreaction

European Central Bank Governing Council Member Olli Rehn has described the recent turbulence in global stock markets as an “overreaction.” European Central Bank Governing Council Member and Bank of Finland President Olli Rehn assessed the reasons for the historic selling pressure seen in global markets on Monday. Rehn said that the global selling wave was not caused by the fundamentals of the economy, and that the market overreacted amid uncertainty and weak market liquidity during the holiday season. Rehn said that central banks do not tend to react to individual market changes, and noted that the ECB continues to carefully monitor the overall picture of the economy in terms of price and financial stability, as well as growth and employment. On the other hand, Rehn said that the US economy remained “relatively strong” despite the US employment figures for July, which were released on Friday, falling short of market expectations. Global markets had faced historic selling pressure on the first trading day of the week due to rapidly strengthening recession concerns in the US and developments in Asian markets.