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Jul 20, 2012

ECB turns screws on Greece, stops accepting collateral

FRANKFURT, July 20 (Reuters) – The European Central Bank
turned up the heat on Greece on Friday ahead of a review of its
bailout programme, saying it would stop accepting Greek bonds
and other collateral used by Greek banks to tap ECB funding, at
least until after the review.

The ECB move, which analysts said was aimed at stepping up
pressure on Athens to adhere to the commitments of its EU/IMF
bailout, will force Greek banks to turn to their national
central bank for Emergency Liquidity Assistance (ELA) funds.
Those funds will be more expensive than funds available in the
ECB’s regular liquidity operations.

Jul 17, 2012

ECB’s Draghi: senior debt burden sharing evolving

FRANKFURT, July 17 (Reuters) – European Central Bank (ECB)
President Mario Draghi noted on Tuesday that the question of
burden sharing with senior bond holders is evolving in Europe, a
spokesman for the ECB said, in the first remarks to be
attributed to the president publicly on the matter.

In a limited change of policy, the ECB is now willing to see
senior bondholders take losses when banks that are not
systemically important fail, but euro zone finance ministers
oppose such a move, euro zone officials said on Monday.

Jul 17, 2012

German ZEW index drops for third straight month in July

MANNHEIM, Germany, July 17 (Reuters) – German analyst and
investor sentiment dropped for a third consecutive month in
July, a survey showed on Tuesday, providing further evidence
that the euro zone crisis is taking its toll on morale in
Europe’s largest economy.

But the ZEW think tank, which conducts the monthly poll,
said expectations may have now hit bottom and that the outlook
for the rest of the year should prove stable.

Jul 12, 2012

Banks slash ECB overnight deposits, but sit on cash

FRANKFURT/CASABLANCA, Morocco (Reuters) – Banks slashed the amount of money they parked at the European Central Bank after it stopped paying interest on overnight deposits on Wednesday, but there was no sign they were using it to lend more or buy the bonds of crisis-hit euro zone states.

The unprecedented cut in deposit rates to zero – approved last week – means banks now get nothing for parking cash at the ECB and officials hope that will nurture more interbank lending by encouraging lenders to look for more profitable options.

Jul 5, 2012

ECB cuts rates to new low to aid flagging economy

FRANKFURT, July 5 (Reuters) – The European Central Bank cut
interest rates to a record low on Thursday to breathe life into
a deteriorating euro zone economy and back up measures agreed by
government leaders last week to tackle the bloc’s debt crisis.

The quarter-point cut in the ECB’s main refinancing rate to
0.75 percent was in line with market expectations and followed a
dire batch of economic data that show even euro zone powerhouse
Germany is entering a modest downturn.

Jul 5, 2012

Economic gloom seen pushing ECB to cut rates

FRANKFURT, July 5 (Reuters) – The European Central Bank is
widely expected to cut borrowing costs to a record low on
Thursday to support a deteriorating euro zone economy and
complement measures agreed by government leaders last week to
tackle the bloc’s debt crisis.

Economic surveys released on Wednesday suggested even euro
zone powerhouse Germany is entering a modest downturn and
investors want the ECB to take action. The consensus forecast is
for a 1/4-percentage point cut in its main interest rate.

Jun 27, 2012

ECB lays ground for rate cut, impact could be minor

BERLIN/FRANKFURT (Reuters) – There is nothing to stop the European Central Bank cutting interest rates further, a senior policymaker said on Wednesday, adding to expectations it could act as soon as next week to counter dimming growth prospects and help tackle the euro zone crisis.

Executive Board member Peter Praet’s intervention followed his colleague Benoit Coeure, who said last week cutting rates was an option and one that would be discussed at the ECB’s July 5 meeting.

Jun 20, 2012
via MacroScope

ECB gets down with the kids


Jens Weidmann, Christian Noyer, Yves Mersch and the rest of the ECB’s Governing Council might want to start looking over their shoulders - Mario Draghi is now asking school pupils how the bank should set its policies.

Star secondary-school pupils from all over the Europe gathered in Frankfurt on Wednesday to display their monetary policy skills and received high praise from Draghi.

Jun 20, 2012

Bond-buying by EU rescue funds unlikely and maybe unwise

MILAN/FRANKFURT June 20 (Reuters) – A call for euro zone
bailout funds to buy government debt of countries like Spain
and Italy is a long way from being heeded and even if it was, is
unlikely to win over investors unless the European Central Bank
also steps in decisively.

At a G20 summit in Mexico on Tuesday, Italian Prime Minister
Mario Monti proposed the bloc’s two rescue funds intervene to
help his country service its sovereign debt.

Jun 19, 2012

German economic morale dive is sharpest since 1998

MANNHEIM, Germany (Reuters) – German analyst and investor morale sank in June at its fastest rate since October 1998 on worries about the health of the Spanish banking sector and uncertainty over the Greek election outcome, a survey showed on Tuesday.

The main reading from the ZEW think tank’s monthly poll of economic sentiment fell to -16.9, undershooting even the weakest forecast in a Reuters poll of 42 economists. The data adds to signs that Germany, Europe’s paymaster and growth engine, is beginning to feel the bloc’s pain.

    • About Sakari

      "I am part of the Reuters team covering the European Central Bank. Before moving to Frankfurt in early 2009, I was based in Helsinki, where I wrote about the Finnish economy and paper industry."
      Joined Reuters:
      Finnish, English, German, Swedish
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