The European Central Bank (ECB) has left the key interest rate for the euro zone to its low of 1.0 per cent. Economists had expected the interest break, after the Central Bank had lowered the key interest rate to the supply of commercial banks in the euro area with Central Bank money end of 2011 in two steps. Since then, economic data have positively surprised.Because the solution the euro government debt crisis and the rescue of Greece threatened by bankruptcy continue to wait, economists expect a further relaxation of monetary policy, the situation should be pointed to himself. Low interest rates make cheaper loans and can push to growth.Observers expect ECB Chairman Mario Draghi keep open all options and do not exclude additional interest rate steps. It is already decided that the ECB will offer a second time for the unusually long period of three years of cheap money to the commercial banks at the end of the month.Cheap money is to markets stabilisierenKurz before Christmas the Federal Reserve in this way had lent almost EUR 500 billion in financial institutions in the euro area. Thus to revived the business of banks with each other and a credit crunch prevent - because that would further burden the already ailing economy. The measure calmed the bond markets and gave the stock market strong Kursgewinne.Zuletzt there had been speculation about the participation of the ECB on the Greek debt section. The Federal Reserve has not commented this. Economists think it conceivable that the ECB transfers their Greek Government bonds worth of estimated 45 billion euro - which is likely have bought them at a discount of approximately 25 percent - no gain or loss to the Rescue Fund EFSF. This could give the profits to Greece. Thus, the Federal Reserve would be outside before and not in danger, to violate the ban on public sector finance with the music press.
Thursday, February 9, 2012
ECB leaves key interest rates at historic lows
The European Central Bank (ECB) has left the key interest rate for the euro zone to its low of 1.0 per cent. Economists had expected the interest break, after the Central Bank had lowered the key interest rate to the supply of commercial banks in the euro area with Central Bank money end of 2011 in two steps. Since then, economic data have positively surprised.Because the solution the euro government debt crisis and the rescue of Greece threatened by bankruptcy continue to wait, economists expect a further relaxation of monetary policy, the situation should be pointed to himself. Low interest rates make cheaper loans and can push to growth.Observers expect ECB Chairman Mario Draghi keep open all options and do not exclude additional interest rate steps. It is already decided that the ECB will offer a second time for the unusually long period of three years of cheap money to the commercial banks at the end of the month.Cheap money is to markets stabilisierenKurz before Christmas the Federal Reserve in this way had lent almost EUR 500 billion in financial institutions in the euro area. Thus to revived the business of banks with each other and a credit crunch prevent - because that would further burden the already ailing economy. The measure calmed the bond markets and gave the stock market strong Kursgewinne.Zuletzt there had been speculation about the participation of the ECB on the Greek debt section. The Federal Reserve has not commented this. Economists think it conceivable that the ECB transfers their Greek Government bonds worth of estimated 45 billion euro - which is likely have bought them at a discount of approximately 25 percent - no gain or loss to the Rescue Fund EFSF. This could give the profits to Greece. Thus, the Federal Reserve would be outside before and not in danger, to violate the ban on public sector finance with the music press.
