hurricanemaxi
Joined: 17 Sep 2011
Posts: 83
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 Posted: Fri Sep 23, 2011 10:26 pm Post subject: ECB Policy Makers Signal Readiness to Act in October as Debt |
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The European Central Bank may step up efforts to boost growth and ease financial-market tensions as early as next month, Governing Council members said.
Austria’s Ewald Nowotny and Belgium’s Luc Coene said in Washington that potential measures include the reintroduction of 12-month loans to banks. Asked if an interest-rate cut is warranted, Coene said while that wouldn’t help to bring down longer-term borrowing costs, “the ECB has never ruled out things beforehand.”
“If the data in early October shows that things are worse than we anticipated we will look at the kind of decisions we have to take for that,” he said in an interview late yesterday.
European policy makers are under pressure from counterparts around the globe as their failure to contain the region’s sovereign-debt crisis stokes concern the world is on the brink of another recession. Their comments come as European officials debate how to increase the size of their bailout fund to restore confidence in its firepower.
With money-market tensions increasing, the ECB has already reintroduced a six-month loan and continues to offer banks as much cash as they want at its benchmark rate in weekly, monthly and three-month refinancing operations. It last conducted a 12- month loan in December 2009.
“The ECB will probably discuss reintroducing a 12-month tender,” Nowotny told reporters in Washington today. “We could perfectly do that when we feel there is an urgent need for that -- I don’t think so for the moment, but it could be in two weeks,” Coene said. The ECB council next convenes on Oct. 6.
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