FRANKFURT (Reuters) – Mario Draghi faces a baptism of fire on his debut as ECB president and a highly-charged decision over escalating the bank’s response to the deepening euro zone crisis.

Greek Prime Minister George Papandreou’s shock pledge to hold a referendum on a new bailout package has thrown Greece’s euro zone membership into question, raised market pressure on Draghi’s native Italy and left the European Central Bank as the only short-term bulwark against euro zone contagion.

FRANKFURT (Reuters) – Mario Draghi faces a baptism of fire on his debut as ECB president and a highly-charged decision over escalating the bank’s response to the deepening euro zone crisis.

Greek Prime Minister George Papandreou’s shock pledge to hold a referendum on a new bailout package has thrown Greece’s euro zone membership into question, raised market pressure on Draghi’s native Italy and left the European Central Bank as the only short-term bulwark against euro zone contagion.

MUNICH, Germany, Oct 27 (Reuters) – The crisis deal agreed
by euro zone leaders will reduce the risks faced by monetary
policy and redraw the boundary line with fiscal policy, European
Central Bank Governing Council member Jens Weidmann said on
Thursday.

European leaders struck a deal in the early hours of
Thursday to provide debt relief for Greece, recapitalise
hard-hit European banks and scale up the currency bloc’s bailout
fund — the European Financial Stability Facility (EFSF) — to
give it firepower of 1.0 trillion euros. (for story click
)

Frankfurt (Reuters) – European Central Bank President Jean-Claude Trichet is expected to prepare the ground for a pre-Christmas interest rate cut at his final policy meeting on Thursday and offer banks further protection against the euro zone’s worsening debt storm.

The ECB is widely expected to keep rates unchanged at 1.5 percent when it meets in Berlin, but calls for a cut have grown louder in recent weeks amid signs the euro zone economy is deteriorating further and as Greek default fears weigh heavily on confidence in the bloc’s banks.

PARIS/FRANKFURT (Reuters) – German engineering group Siemens (SIEGn.DE: Quote, Profile, Research, Stock Buzz) withdrew funds from Societe Generale (SOGN.PA: Quote, Profile, Research, Stock Buzz) in July because of underperformance, not fears over the French bank’s financial health, a Paris-based source said on Tuesday.

The source told Reuters that the deposits at SocGen had been placed in an investment vehicle but was unable to say what the amount was.

PARIS/FRANKFURT, Sept 20 (Reuters) – German engineering
group Siemens (SIEGn.DE: Quote, Profile, Research, Stock Buzz) withdrew deposits from Societe Generale
in July because of the funds’ underperformance and not
because of fears over the French bank’s financial health, a
Paris-based source said on Tuesday.

The Financial Times newspaper had reported Siemens withdrew
500 million euros ($681 million) from an unknown large French
bank two weeks ago, partly because of worries over its future
health, and transferred them to the European Central Bank.

WROCLAW, Poland, Sept 17 (Reuters) – The euro zone should
not take up Washington’s suggestion of leveraging its bailout
fund to fight the bloc’s debt crisis, the head of the German
Bundesbank said on Saturday.

Jens Weidmann told journalists after a meeting of European
finance ministers in Poland that it was not clear how the
European Financial Stability Facility (EFSF) could be leveraged
without impeding the European Central Bank’s independence.

WROCLAW, Poland, Sept 17 (Reuters) – EU officials sought to dispel fears about a bank lending freeze on Saturday, despite a stark warning from senior aides that a “systemic” crisis in sovereign debt now threatened a new credit crunch.

Last week, central banks around the world announced they would work together to offer extra loans in U.S. dollars to banks, a move designed to prevent money markets from freezing up in the wake of Europe’s sovereign debt crisis.

WROCLAW, Poland (Reuters) – A requirement for Ireland to pay a 20 percent collateral “buffer” on loans drawn down from the European Financial Stability Facility (EFSF) rescue fund has been dropped, finance minister Michael Noonan said on Friday.

The latest concession on the interest rate charged on the country’s bailout will earn the state a rebate of around 600 million euros (523.9 million pounds) in 2016, Noonan said on the sidelines of a meeting of euro zone finance ministers in Poland.

WROCLAW, Poland, Sept 15 (Reuters) – EU countries that want
to bail out struggling banks will continue to have leeway to do
so, the official in charge of enforcing antitrust rules said on
Thursday, promising to keep rules flexible into next year.

EU Competition Commissioner Joaquin Almunia said he intended
to keep softer rules in place on state aid for banks beyond the
start of next year, when the stricter regime was due to return,
because of difficulties in financial markets.