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The head of the European Central Bank warned that global friction over trade — such as U.S. threats to impose more tariffs — is holding back the economy as he underlined the bank’s readiness to deploy more stimulus if needed. Mario Draghi said Wednesday that an improving jobs market and rising wages were helping the economy in the 19 countries that use the euro but uncertainties like trade disputes and Brexit are hurting it. “Global headwinds continue to weigh on euro area growth,” he told a news conference after the central bank kept its key interest rates and policy promises...

Former Bundesbank president Hans Tietmeyer, a key architect of the euro who oversaw its introduction in Germany, has died at the age of 85, the central bank announced Wednesday. Tietmeyer ran the mighty Bundesbank from 1993 to 1999, a period that straddled the aftermath of German reunification as well as the launch of the single European currency and the creation of the European Central Bank. […] A fierce defender of the independence of central banks, Tietmeyer was credited with ensuring that the same principle was enshrined in the statutes of the ECB, which was modeled in large part on the...

Donald Trump’s surprise election victory has helped solidify expectations for an interest rate increase next month by the U.S. Federal Reserve — but may have complicated a decision for the European Central Bank, which faces a difficult choice over more stimulus. For the ECB, the issue is what to do about its bond-buying program, which pumps new money into Europe’s struggling economy each month to try to accelerate growth and inflation. The Fed and the ECB — two of the world’s most important central banks — will be making its policy decisions before Trump is inaugurated Jan. 20, while still...

The European Central Bank left its stimulus measures on hold Thursday and warned governments in the 19 country euro currency union that they need to do more to help the economy grow and push up inflation to healthier levels. The bank kept its key interest rates unchanged and decided against extending the duration of its existing bond-buying stimulus program. Bank President Mario Draghi seemed relatively confident about the economy and less inclined to hint at more stimulus than some analysts had expected. Instead, he used his news conference to urge governments to do their part. He said that implementation of...

German property firms expect a boom in Frankfurt as financial businesses move activities and staff out of London in the wake of Brexit, an industry survey showed on Monday. A majority of 72 percent of respondents believed financial center Frankfurt, rather than rivals Dublin, Paris, or Amsterdam, would gain the most from Britain leaving the European Union, the study of 555 firms by consultants Ernst & Young (EY) found. The German property market as a whole would get a boost from Brexit, 57 percent of those polled said, with large majorities expecting prices for commercial and residential properties to increase....

The European Central Bank is ready to give the eurozone economy a bigger dose of stimulus if turmoil in China and weaker global growth hurt its modest recovery, President Mario Draghi said Thursday. Market volatility, concern over the effects of a looming interest rate increase in the U.S. and a drop oil prices have spawned uncertainty over the global economy, leading the ECB to cut its inflation and growth forecasts for the eurozone. Draghi said the ECB can add to its €1.1 trillion ($1.2 trillion) program if needed to raise inflation or support growth. […] The stimulus is intended to...

The eurozone experienced negative inflation for the second month in a row, according to a flash estimate published today (30 January) by Eurostat, the European Union’s statistical office. Inflation is expected to be at −0.6%, with consumer prices falling further than economists had forecast. The fall represents the biggest decline in prices in the history of the euro. […] The drop was driven by the fall in energy prices (−8.9%, compared with −6.3% in December). […] The deflationary spiral comes as Mario Draghi, the president of the European Central Bank (ECB), is trying to tackle deflation with a policy of...

The long-anticipated collapse of the euro is here. When European Central Bank president Mario Draghi unveiled an open-ended quantitative easing program worth at least 60 billion euros a month on Thursday, stocks soared but the euro plummeted like a rock. It hit an 11 year low of $1.13, and many analysts believe that it is going much, much lower than this. The speed at which the euro has been falling in recent months has been absolutely stunning. Less than a year ago it was hovering near $1.40. But since that time the crippling economic problems in southern Europe have gone...

The European Central Bank will plough €1.1 trillion into the eurozone economy in a last-ditch attempt to breathe life into the European economy. At its monthly governing council on Thursday (January 22), the bank’s governing council agreed to start buying up to €60 billion of government bonds from March in an unprecedented quantitative easing program. The program is open-ended, and will run until September 2016 at the earliest. Speaking at a press conference following the governing council meeting, ECB president Mario Draghi said that the bond-buying program would remain in place “until we see a sustained adjustment in the path...

The European Central Bank on Thursday (6 November) formally made public a letter showing that the eurozone bank threatened to pull emergency bank funding if Ireland did not enter a bailout and undertake austerity measures in 2010. The letter, signed by the then-ECB president Jean-Claude Trichet, speaks of “great concern” about the solvency of Irish lenders—which had loaned heavily to the overheated construction sector—and the extent to which the whole eurosystem was exposed. It then says that the ECB would cut off emergency funding to Irish banks unless Ireland meets four conditions, including getting a bailout and undertaking “fiscal consolidation,...

ECB ready to pump €1 trillion into euro zone economy Central bank ramps up efforts to rescue single currency bloc from deflation risk The European Central Bank is ready to inject up to €1 trillion of new liquidity into the euro zone economy as it ramps up efforts to rescue the single currency bloc from the risk of Japanese-style deflation, Mario Draghi confirmed yesterday. The ECB president also said the central bank’s governing council was unanimous in its commitment to use further unconventional tools, including quantitative easing, should economic conditions deteriorate. He added that the central bank had stepped up...

Europe’s biggest banks are facing a day of judgment as the European Central Bank prepares to unveil the results of a yearlong search through the dark corners of their finances. It’s a step that comes none too soon for the struggling economy of the 18-country eurozone. The ECB review to be unveiled Sunday seeks to identify banks that are too weak to lend to businesses or make it through another recession and force them to strengthen their finances. It includes a detailed look at 130 banks’ loans, holdings and investments, as well as a so-called stress test that simulates how...

The debate over Germany’s insistence on eurozone austerity has flared anew as an ailing France continues to demand economic stimulus. The European Central Bank may now be siding with Paris, leaving Merkel looking increasingly alone. […] Berlin is particularly alarmed by the stance taken by ECB head Mario Draghi. At the annual conference of top central bankers from around the world at Jackson Hole, Wyoming in August, Draghi surprised those present by saying “there is leeway to achieve a more growth-friendly composition of fiscal policies.” It was a comment that came close to the kind of debt-fueled growth stimulus measures...

One of European Central Bank President Mario Draghi’s most important duties is watching his mouth. One ill-considered utterance is enough to sow panic on the financial markets. But during a press conference earlier this month, Draghi allowed himself a telling slip. Speaking to gathered journalists at the Spring Meetings of the International Monetary Fund and the World Bank, Draghi twice almost uttered a word he has been at pains to avoid. “Defla…”, Draghi began, before stopping himself and continuing with the term “low inflation.”Yet despite Draghi’s efforts, the specter of deflation was omnipresent in Washington during the meetings. And it...

Germany's Constitutional Court ruling last Friday marks a significant escalation in efforts to rein in the European Central Bank. The ruling's message? Either the European Court of Justice has to stop bond purchases or German justices will. It is also a clear indication that Germany's highest court is extremely skeptical of the ECB. Draghi's 2012 announcement that the ECB would embark on unlimited sovereign bond purchases from ailing euro-zone member states, the court found, is incompatible with European law. The ruling notes that OMT "exceeds the mandate" of the ECB and "encroaches on the responsibility of the member states for...

Bankers caught fixing the interbank lending rate LIBOR could in future face criminal charges after the European Commission announced plans on Wednesday (25 July) to widen the scope of the ongoing legislation on Market Abuse to include rate fixing. Unveiling the proposals, which have been added to the Market Abuse legislation aimed at combating insider dealing and market manipulation, Justice Commissioner Viviane Reding accused those involved as acting as though they were “more banksters than bankers.” Public confidence in banks have “taken a nosedive with the latest scandal,” she said. Among the changes to the legislative package, which was tabled...

The spotlight in the European debt crisis has now shifted decisively toward the influential leader of the European Central Bank, Mario Draghi, who emerged from the recent summit meeting in Brussels with new powers and stronger backing to address the Continent’s financial woes. Political leaders took significant strides toward making the central bank more like the United States Federal Reserve, giving it authority to oversee the eurozone’s largest banks and, once that new regulator is in place as soon as the end of this year, a likely role in rescuing Spanish banks with capital directly from the European rescue funds....

For the growing chorus of observers who fear that a breakup of the euro zone might be at hand, Chancellor Angela Merkel of Germany has a pointed rebuke: It’s never going to happen. But some banks are no longer so sure, especially as the sovereign debt crisis threatened to ensnare Germany itself this week, when investors began to question the nation’s stature as Europe’s main pillar of stability. On Friday, Standard & Poor’s downgraded Belgium’s credit standing to AA from AA+, saying it might not be able to cut its towering debt load any time soon. Ratings agencies this week...

Without a radical change of strategy, the ECB risks pushing the weakest states into a debt-compound spiral that can only end in bond crises and/or the disintegration of Europe's monetary union – whichever comes first. The International Monetary Fund says the eurozone will contract by 4.8pc this year, worse than the UK (-4.2pc) or the US (-2.6pc). The deepest damage will occur next year as Europe remains mired in slump, even as the rest of the world recovers. It is the length of recession that matters most for jobs, social stability, and public finances. I am not easily shocked any...

Today, the Bank of Canada, the Bank of England, the European Central Bank (ECB), the Federal Reserve, the Bank of Japan and the Swiss National Bank are announcing coordinated measures designed to address the continued elevated pressures in US dollar short-term funding markets. These measures, together with other actions taken in the last few days by individual central banks, are designed to improve the liquidity conditions in global financial markets. The central banks will continue to work together closely and will take appropriate steps to address the ongoing pressures. Bank of England action The Bank of England will offer...