Rich world's finances at stake in crisis-ECB's Trichet

LONDON, Nov 18 (Reuters) - The global financial crisis marks the first time since World War Two that the heart of the finances of the industrial world has been at stake, European Central Bank President Jean-Claude Trichet said on Tuesday.

He said the situation could be solved by joint efforts of central banks and governments, with a key role for the private sector. But, in an interview with Sky News in London, he declined to be drawn out on how long it would take.

"It is the first time that the heart of the finances of the industrialised countries are at stake, are in a very, very turbulent and difficult episode," he said.

"In that sense, it is new and it is the first time since World War Two," he said, after giving a speech at an event organised by the Daiwa Anglo-Japanese Foundation.

Trichet said the crisis was "solvable by joint efforts of authorities and certainly central banks, governments and ... also the private sector has an essential role to play, of course, to get out of that situation."

It was "solvable at the level of the planet because we are all in the same boat."

Emerging from the crisis would take "a certain period of time."

He declined to be more specific about how long it would take, saying: "It will take time, but we have to all be up to our responsibilities in a difficult episode."

Official data released last week showed the 15-nation euro-zone economy had shrunk by 0.2 percent for the second quarter in a row, meaning it is in recession. A week earlier, the ECB cut interest rates by 50 basis points and signaled another reduction was possible next month.

Some analysts say that membership of the European single currency has provided a measure of shelter from the storm.

EURO MEMBERSHIP UP TO BRITISH PEOPLE

Asked if there would be an advantage in Britain joining the euro, Trichet said it was an issue for the British people.

"All I can say myself is that Britain would be welcome any time in the euro area. We are absolutely unanimous and we will see when and at which precise moment ... It's really up to the British people," he said.

Asked if private banks in the City, London's financial district, behaved irresponsibly in the crisis, he said he would not single out any particular marketplace or group of bankers.

"We have a global financial system which clearly had a lot of defects," Trichet said.

"This is clearly demonstrated and we have to draw all the lessons from the observations that we are making. It's true here, it's true on the continent (Europe), it's true in the United States of America," he said.

A lot of work on tackling the crisis had been done by the International Monetary Fund and the Financial Stability Forum before last weekend's G20 summit in Washington, he said.

"I think the meeting of the (G)20 gives a lot of impetus to speed up the process and to be as active as possible in implementing what is necessary -- more transparency, much more transparency for financial instruments, for institutions, for markets (and) much more fight against pro-cyclicality," he said.

"The system is such that it amplifies the booms and the busts. We must, on the contrary, try to reduce the amplitude of the booms and the busts and that's very, very hard work to do, but we have to do it," he said. (Reporting by Adrian Croft; Editing by Jan Paschal)