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Highlights: Financial leaders meeting in Washington

Sep 25, 2011, 9:12 a.m.

KLAUS REGLING, HEAD OF EUROPEAN FINANCIAL STABILITY FACILITY ON LEVERAGING THE EFSF

"We are very close to implementing the decision of July 21 fully. The EFSF will almost double in fire power and there are ideas about how to leverage it even further. There will be new instruments that the EFSF can use. All that will be important in the short term to do crisis management."

"If we get to a situation where 89 percent (of the EFSF) is used there are ideas about how to leverage the resources ... There are serious concerns about the compatibility with the ECB because it may not be in line with the prohibition of market financing, so I think it is very unlikely that you will see that. But there ideas about how to leverage the EFSF as necessary without leveraging the ECB"

ON EUROBONDS

"This, under the best of circumstances, this will take a decade, maybe two. It would require substantial treaty changes. I don't think the public is ready for it in most cases. It would mean on the German budget that decisions could be taken in Brussels against the vote of Germany; the German public is not ready for that, and the same is true in other countries so we have to work with the system we have."

ECB GOVERNING COUNCIL MEMBER EWALD NOWOTNY ON ECB

"The ECB has a mandate to provide unlimited liquidity to banks, it has no mandate to lend to insolvent banks."

ON THE EURO ZONE CRISIS:

"Crisis starts with crisis of financial sector this then translates into crisis of the real economy... This then translates into a crisis of the public finances. The challenge is does this lead to a feedback to another crisis of the financial sector."

"Strongly want to emphasize, first implement decisions made of July 21. It is not helpful that we have an avalanche of new proposals every week."

"I am very much in favor of a more federalist approach in euro, but we have to be realistic, this requires treaty changes."

"The ECB and the central banks have to take the rules we have set ourselves seriously. It is an issue of credibility."

"Everybody needs a certain transfer union but I think there are public limits to the level of the transfer."

"One has to think carefully about the easy proposals that would increase the transfer union... Nothing can substitute for fiscal discipline"

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