The ECB's Ackermann weather vane.

• Position: Off the News - European Central Bank - Brief article

European Central Bank strategists in mid-March were stunned when the head of Deutsche Bank, Josef Ackermann, at a private conference in Frankfurt surprised the audience by suggesting he had lost confidence in the "self-healing powers" of financial markets. He then called for measures going beyond the existing liquidity provisions offered by central banks. He called for "state intervention," including the buying up of nonperforming (U.S.) mortgage loans.

To the general audience, Ackermann's comments were widely interpreted as merely supporting his American colleagues. However, to the European Central Bank strategists, regulators, and financial analysts in attendance, the comments reflected the growing fear that the subprime-related problem in Europe may be considerably worse than the banks officially are admitting. Recently the International Monetary Fund...