Senior Economics Correspondent, Germany
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Jul 9, 2014

ECB looks to banks to deliver QE on its behalf

FRANKFURT/PARIS, July 9 (Reuters) – The European Central
Bank is hoping a new round of long-term loans will be used by
banks to drive down borrowing costs – a substitute for an
asset-purchase scheme of its own which would avert a potentially
damaging internal split.

The ECB unveiled the loans plan last month as part of a
package of measures to breathe life into a sluggish euro zone
economy, where inflation is running far below the central bank’s
target and there is a dearth of credit to smaller firms.

Jul 3, 2014

ECB says measures will push inflation up, but money-printing still possible

FRANKFURT (Reuters) – A raft of policy measures introduced last month will help lift inflation and support bank lending but the European Central Bank stands ready to create money in future if required, President Mario Draghi said on Thursday.

The ECB left interest rates steady a month after cutting them to record lows and pushing the deposit rate into negative territory for the first time – effectively charging banks for holding their money overnight to prompt them to lend to businesses.

Jul 3, 2014

ECB holds rates, faces grilling on new measures

FRANKFURT (Reuters) – The European Central Bank left interest rates unchanged at record lows on Thursday, holding fire while it assesses the impact of a barrage of measures launched last month to pep up the flagging euro zone economy.

The ECB held its main refinancing rate at 0.15 percent and its deposit rate at -0.10 percent, effectively charging banks for holding their money overnight as it tries to encourage them to lend to small- and medium-sized businesses.

Jul 1, 2014

ECB’s Draghi faces questions over guidance on rates

FRANKFURT (Reuters) – European Central Bank President Mario Draghi faces a grilling after Thursday’s policy meeting over forward guidance on interest rates after he hinted at a stronger message last week without being specific.

To breathe life into a sluggish euro zone, the ECB cut interest rates to record lows at its June 5 meeting, launched a series of measures to pump money into the economy and pledged to do more if needed to fight off the risk of Japan-like deflation.

Jun 6, 2014

Facing barriers, Draghi will keep markets waiting for any more ECB action

FRANKFURT (Reuters) – European Central Bank chief Mario Draghi has whetted markets’ appetite for more ECB policy action but investors will have to wait some time before he uses the only real option he has left – a major asset-buying plan.

First he will want to assess the effectiveness of the loosening package he presented on Thursday – rate cuts and measures to pump money into the sluggish euro zone economy. Then he will also have to overcome German resistance if he wants to do anything further.

Jun 6, 2014

Analysis – Facing barriers, Draghi will keep markets waiting for any more ECB action

FRANKFURT (Reuters) – European Central Bank chief Mario Draghi has whetted markets’ appetite for more ECB policy action but investors will have to wait some time before he uses the only real option he has left – a major asset-buying plan.

First he will want to assess the effectiveness of the loosening package he presented on Thursday – rate cuts and measures to pump money into the sluggish euro zone economy. Then he will also have to overcome German resistance if he wants to do anything further.

May 30, 2014

To avoid rate cut backfiring, banks will need incentive from ECB

FRANKFURT/LONDON (Reuters) – The European Central Bank is gearing up to charge banks for depositing with it, something that will require careful manoeuvring if it is not to create the opposite result from that intended.

The idea of negative rates – essentially making banks pay for having their funds held overnight – is to push banks into lending the money, hence boosting the economy.

May 22, 2014

ECB to ease stress test for Franco-Belgian Dexia

DUBLIN/FRANKFURT, May 22 (Reuters) – ECB officials agreed on
Thursday that Franco-Belgian bank Dexia would not have
to prove it could withstand a financial crisis in a Europe-wide
stress test, reducing the chances of it needing further state
aid, sources familiar with the talks said.

Belgium and France have already pumped nearly 12 billion
euros ($16.4 billion) into Brussels-based Dexia since the
financial crisis, taking control of it in the process, and are
keen not to put in more to a loss-making institution that is
being wound down.

Apr 29, 2014

ECB fails to fully offset bond buys again as money markets tighten

FRANKFURT (Reuters) – A fall in euro zone lending, weaker-than-expected German inflation and signs of tightening in money markets compounded the European Central Bank’s policy conundrum on Tuesday as it weighs up whether to act next week.

ECB President Mario Draghi last week identified a weakening of the euro zone inflation outlook and tensions in short-term money markets as potential triggers for fresh policy action.

Apr 29, 2014

Warning signals flash for ECB ahead of May meeting

FRANKFURT (Reuters) – A fall in euro zone lending, weaker-than-expected German inflation and signs of tightening in money markets compounded the European Central Bank’s policy conundrum on Tuesday as it weighs up whether to act next week.

ECB President Mario Draghi last week identified a weakening of the euro zone inflation outlook and tensions in short-term money markets as potential triggers for fresh policy action.

    • About Paul

      "I lead our economic news file from Berlin, where we report on the performance of the German economy – Europe’s largest – and economic policy: everything from financial regulation to dealing with the euro zone debt crisis. I previously reported on political and economic news from Paris and on earlier assignments worked in Frankfurt, Vienna and London."
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