ECB head:U.S. subprime crisis could spread

BASEL, Switzerland, Sept. 10 (UPI) -- The U.S. subprime mortgage crisis could spread into the rest of the U.S. economy, the head of the European Central Bank said Monday.

"There is a probability of fallout on the real economy in the USA," President Jean-Claude Trichet said on behalf of the Group of 10 industrial nations after world central bank governors met at the Bank for International Settlements.

The BIS is an international organization of central banks that seeks to "foster cooperation among central banks and other agencies in pursuit of monetary and financial stability."

Financial volatility has spread worldwide, Trichet said, and all economies, "in particular in the United States," require "close observation and monitoring."

"This is no time for complacency," he said.

Trichet couched his warning by adding he believed much of "the rest of the world" had generally "good fundamentals," with "solid reasons" for continued economic growth -- provided central bankers remained vigilant.