September 16, 2007	Sunday	Ramazan 03, 1428

HELSINKI, Sept 15:Inflation risks in the euro zone are on the upside, a member of the European Central Bank governing council, Erkki Liikanen, told Finnish daily Turun Sanomat.

Most important is to keep long-term inflation expectations anchored. Now we are following closely economical developments, analysing where the uncertainty leads, Liikanen was quoted as saying in an interview published on Saturday.

Financial markets have been in turmoil since mid-August as concerns about a fallout from US subprime mortgages hit banks globally and triggered a sell-off in risky assets.

Liikanen, the governor of Bank of Finland, said it was clear the turmoil would have negative impact on economic growth, but said it was uncertain how big will the impact be in different parts of the world.

Liikanen called for increasing transparency of banks and financial institutions to recover confidence in the financial markets and said banks have a lot of work in front of them in revaluing their assets.

On Wednesday ECB injected a record 75bn euro ($104bn) loan to banks in extra three-month funds.

Financial institutions should use this time in order to go through their bonds, open up the risks and price them again, Liikanen said in the Finnish language interview.—Reuters