• 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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