The European Central Bank cut interest rates a quarter point to a record low of 0.5pc and threatened to punish banks for hoarding funds, but was faulted for doing too little to pull Europe out of deep recession.
by Ambrose Evans-Pritchard, The Telegraph:
Yields on 10-year German Bunds fell to an all-time low of 1.16pc, signalling the risk of a deflationary crisis and a slide towards outright depression.
Mario Draghi, the ECB’s chief, said the bank “stands ready to act” with further stimulus if needed but insisted that the economy would recover “later this year”.
The bank failed to deliver the expected measures to alleviate a serious credit crunch for small firms across Southern Europe, agreeing only to study possible options.
“They are a long way behind the curve. A quarter point cut is a drop in the ocean at this stage and nothing that Draghi said will turn things around,” said David Owen from Jefferies Fixed Income.
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