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ECB pumps new money to aid banks and keeps interest rates low
Date 09/10/2011 16:04  Author webmaster  Hits 1005  Language Global
• 09 OCT 2011

Departing president Trichet warns of 'intensified downside risks' to eurozone economy

By Nikhil Kumar

The European Central Bank will step up its support for struggling banks after deciding against lowering interest rates at what was Jean-Claude Trichet's last policy meeting before he stands down as president of the central bank later this month.

The ECB governing council held rates at 1.5 per cent when it gathered in Berlin yesterday, although Mr Trichet, speaking after the announcement, acknowledged the "particularly high uncertainty and intensified downside risks" colouring the economic outlook. "Ongoing tensions in financial markets and unfavourable effects on financing conditions are likely to dampen the pace of economic growth in the euro area in the second half of the year," he said.

The decision prompted criticism from Angel Gurria, the head of the Organisation for Economic Cooperation and Development, who said: "I would have gone for a cut in the rate if I had something to do with it, simply because I think our greatest concern now is growth."

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