Word: ecb
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Dates: during 2000-2009
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...ECB, which oversees the common currency in the 15-nation Euro zone, slashed its main lending rate three quarters of a percentage point to 2.5%, following two half percentage point cuts in October. Since credit markets are all but locked up in the wake of the collapse of Lehman Brothers in September, the ECB has ratcheted down its main lending rate by a total of 1.75 percentage points. (Read " Will Europe's Bank Bailout Plan Really Work...
...difference in today's decision however was not just the size of the cut, but the message it sends about the central bank's thinking. Though the ECB remains more optimistic about the economic outlook than many economists, it seems finally to be coming to terms with economic reality. Just a few weeks ago, ECB president Jean-Claude Trichet justified the central bank's moderation in cutting rates by warning about continued high inflation. But speaking to reporters in Brussels, his emphasis was altogether different. "Overall, since our last meeting, evidence that inflation pressures are diminishing has increased," Trichet said...
Maybe so. But given the much steeper cuts that other central banks are making, the ECB move still seems modest in the face of the economic erosion under way. The Bank of England cut its key rate by one percentage point to 2% today, while Sweden's central bank cut its key rate by 1.75 percentage points. The U.S. Federal Reserve's main lending rate now stands at 1%, the lowest level in five decades...
...European scheme to shore up capital of distressed banks and the establishment of a "clear center of joint responsibility for the supervision and liquidity support of cross-border European banks," which he says should be housed in the European Central Bank. (At present, the chief tool available to the ECB is lowering interest rates...
...booming market for its exports, has lately helped drive growth in the 15 nations that use the euro. Rendered more costly by the recent strength of the currency, those exports are under pressure. The result: though inflation within the euro area stands at 4.1% - more than double the ECB's goal of 2% - the region's central bank announced earlier this month it, too, would keep rates on hold. "Both the ECB and Bank of England have been caught between a rock and a hard place," says Matthew Sharratt, an economist at Bank of America in London. "The best they...