Damage control time- "Fed's McDonough -- worries euro to hurt dollar overdone"
(Note that Mr. W.J. McDonough also chairs The Basle Committee on Banking Supervision...
The Basle Committee on Banking Supervision is a committee of banking supervisory authorities which was established by the central bank Governors of the Group of Ten countries in 1975. It consists of senior representatives of bank supervisory authorities and central banks from Belgium, Canada, France, Germany, Italy, Japan, Luxembourg, the Netherlands, Sweden, Switzerland, the United Kingdom and the United States. Its current chairman is Mr. W.J. McDonough, President of the Federal Reserve Bank of New York. The Committee usually meets at the Bank for International Settlements (BIS) in Basle, where its permanent Secretariat is located.)
NEW YORK, Oct 26 (Reuters) - William McDonough, President of the Federal Reserve Bank of New York, said worries that the launch of Europe's common currency, the euro, would hurt the dollar were ''grossly overdone.''
Fears that ''the arrival of the euro will have a risk of investors rushing in the euro and weakening of the U.S. dollar and whether the U.S. dollar would be given an excessive and unfair advantage, these worries are grossly overdone,'' McDonough said at a conference on the euro.
''The strength of the euro will be very gradual,'' McDonough said, adding it would be ''very naive'' to expect a fundamental change in the valuation of the euro versus the dollar after the January launch of the European currency.
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