FRANKFURT (Reuters) – A top U.S. Federal Reserve official urged the European Central Bank on Tuesday to consider employing a U.S.-style quantitative easing programme to counter slowing inflation and recession in the euro zone.
The ECB has engaged in bond purchases in the past but has always withdrawn an equivalent amount of money from markets to ensure its interventions are neutral for the money supply, fearful of stoking inflationary pressures.
FRANKFURT, May 21 (Reuters) – Massive asset purchases are
the closest thing to normal monetary policy once interest rates
get near zero, a senior U.S. Federal Reserve official said on
Tuesday, recommending that the European Central Bank weigh such
action if inflation falls further.
St. Louis Federal Reserve Bank President James Bullard, a
voting member of the Fed’s policy-setting committee this year,
also said the U.S. central bank should keep buying bonds, while
adjusting the pace of purchases up or down, according to
incoming economic data.
MANNHEIM, Germany (Reuters) – German analyst and investor sentiment edged up in May after dropping sharply in the previous month, suggesting the euro zone’s largest economy is overcoming concerns over a flare-up in the bloc’s debt crisis and is back on track to a timid recovery.
Economists said the rise was considerably weaker than they had expected, probably due to the currency bloc’s weak economy weighing on morale, but it still pointed in the right direction.
FRANKFURT (Reuters) – Cutting the European Central Bank’s deposit rate below zero would be an effective way to help the euro zone economy, ECB policymaker Ignazio Visco was quoted as saying on Monday, sending the euro lower.
Taking the deposit rate into negative territory would mean the ECB charging commercial banks for holding their money overnight, something ECB President Mario Draghi has said the central bank was “technically ready” to do.
FRANKFURT, May 3 (Reuters) – To boost bank lending to small
euro zone companies, the European Central Bank wants to revive
an asset class that was widely criticised for its role in the
financial crisis – asset-backed securities.
These allow banks to move at least some credit risk off
their balance sheets by packaging individual loans into new
instruments and selling them on to other investors.
FRANKFURT, May 2 (Reuters) – The European Central Bank is
expected to cut its main interest rate for the first time in 10
months on Thursday, driven to act by an economy wallowing in
recession and freed to do so by sharply falling inflation
Economic data over the past weeks since ECB President Mario
Draghi said the bank stood ready to act if necessary has shown
growth prospects darkening.
FRANKFURT (Reuters) – Comments by European Central Bank policymakers on Monday stressing falling inflation and poor growth prospects in the euro zone suggest the ECB may be leaning towards a further cut in its main refinancing rate.
ECB Vice-President Vitor Constancio said inflation had fallen “rather significantly” and a rate cut was “always a possibility”, but Governing Council member Klaas Knot said the ECB had “little ammunition left” and should use it carefully.
MANNHEIM, Germany, April 16 (Reuters) – German analyst and
investor sentiment fell sharply in April, hit by fears that a
deterioration of the euro zone crisis and a global slowdown, led
by a weakening China, could take a heavy toll on Europe’s
The Mannheim-based ZEW think tank said on Tuesday its
monthly poll of economic sentiment fell to 36.3 points from 48.5
in March. The reading undershot a Reuters poll forecast of 42.0
and sent the euro down against the dollar.
FRANKFURT, April 10 (Reuters) – France’s economic downturn
is putting pressure on the European Central Bank to cut its main
interest rate further even though the impact on the euro zone’s
No. 2 economy would be negligible.
French business activity plummeted in March, putting the
brakes on the bloc’s recovery, as high unemployment weighed on
private consumption that accounts for more than half the French
FRANKFURT, April 4 (Reuters) – European Central Bank
President Mario Draghi opened the door on Thursday to an
interest rate cut as soon as next month, saying his bank stands
“ready to act” to boost the recession-hit euro zone economy.
Speaking at news conference after the ECB held rates at a
record low 0.75 percent, the highest level among the world’s
major central banks, Draghi said discussion at the monthly
meeting had been extensive and the consensus was to hold fire.