Markets need time to digest G7 steps

"We have taken a lot of action in the past days and weeks, we are continuing taking actions," Trichet told a news conference after a meeting of finance ministers and central bankers from the Group of Seven leading nations.

Markets tanked this week despite a global coordinated interest rate cut, extra liquidity injections, a statement by European Union finance ministers they would not allow any financial institution of systemic importance to go under and a comprehensive bank bailout package in Britain.

"My experience of markets is that it always takes a little time for markets to capture all the elements that we are taking and the principles we are displaying," Trichet said. "It is normal that there is a maturing process."

He said the coordinated interest rate cut by the world's major central banks on Wednesday was meant as a confidence boosting signal of central bank unity.

"Central banks at the level of the planet have demonstrated a fantastic capacity to decide together and display close cooperation and unity and I take it that this will be progressively recognised by markets as a very important element of confidence in the current situation," he said.

Trichet said the ECB decided to cut rates because of the financial market turmoil and also because upside inflation risks had diminished and the bank it believed it had regained control of inflation expectations.

"We will continue to act in line with this solid anchoring of inflation exepctations... taking into account all elements as we have in the past," he said.