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Financial Crisis Creating "Gaping Hole" in Economy, Says ECB's González-Páramo

Frankfurt - While inflation expectations are anchored, the current financial crisis is creating a gaping hole in the real economy, European Central Bank member José Manuel González-Páramo said.This is true not only for the euro area but for large economies at large, González-Páramo said at a conference in Madrid, Spain on Friday.The central banker also noted that some countries within the euro zone were in a weakened financial position due to the crisis. However, he stressed that preserving

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ECB Stark Says Excessively Low Rates May be Counterproductive

Frankfurt - European Central Bank Governing Council member Jürgen Stark warned that rate cuts will not solve the financial crisis and that rates at too low a level could even be counterproductive.The lower rates are, the less incentive banks have to clean up their balance sheets and carefully monitor their credit risks, Stark said in an interview with Luxembourg newspaper Tageblatt, published on Saturday.On Thursday, the ECB's Governing Council voted to reduce the central bank's key policy rate

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ECB's Wellink Says Market Conditions Remain "Fragile"

Market conditions remain fragile, and a recovery in the banking system appears to be a long way off, with more countries entering recession, Dutch central banker Nout Wellink said on Friday.Speaking at an event in Amsterdam, Wellink, who also sits on the European Central bank's Governing Council, called for a global solution as a means of resolving the turmoil, saying the current crisis resolution framework has had little effect in fighting the turmoil thus far.The economic recovery

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ECB's Gonzalez-Paramo Says Inflation Expectations are Anchored

European Central Bank policy has managed to anchor inflation expectations, said executive board member Jose Manuel Gonzalez-Paramo.Speaking in Madrid on Monday, he said the central bank's liquidity policy has become a non-conventional tool, but that the bank's main goal remains price stability. On reaction to the global financial crisis, Gonzalez-Paramo said the ECB's balance sheet has doubled, while governments have acted quickly to support European banks. However, he said governments have to be ready to exit

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ECB's Ordonez Expects Sizable Spanish Recession, Weak Credit Growth

Frankfurt - Citing Bank of Spain forecasts, European Central Bank Governing Council member Miguel Angel Fernandez Ordonez said the data point to a sizable recession, which will lead to very weak, and even negative credit growth.In any of the possible scenarios in which we emerge from this crisis, credit conditions will necessarily have to be more limited and more restrictive than before the crisis, Ordonez said while speaking to a parliamentary commission in Madrid on Wednesday.Regarding the financial

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ECB's Ordonez Says Euro Providing "Immense Benefits" to Euro Zone Members

Frankfurt - The euro is providing immense benefits to the members of the monetary union, shielding them from the effects of the current financial crisis, European Central Bank Governing Council member Miguel Angel Fernandez Ordonez said on Friday.Speaking at a conference in Madrid, Spain, the central banker warned that nationally-focused crisis solutions are doomed to fail and called for a higher level of European integration as a way to help boost economies out of their current slump.Responses based

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Forex - Central Banks are ready to cut rates

The Dollar fell on Tuesday as steps by the Federal Reserve to calm chaotic financial markets and a signal by Chairman Ben Bernanke that the central bank was ready to cut rates eroded some of its safe-haven bid. Also, ECB chief Jean-Claude Trichet last week signaled the central bank was ready to start cutting rates. Analysts said the Dollar still re

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Rate Cuts Working Well, but All Options on the Table, Says ECB's Noyer

Frankfurt - Rate cuts and liquidity measures taken by the European Central Bank have worked well during the current economic crisis, ECB Governing Council member Christian Noyer said.However, he noted the central bank is looking at all options to help bolster the economy.Speaking at a press conference in Paris on Tuesday, the central banker also said the ECB is looking at all options to help bolster the economy. Non-conventional measures, such as the purchase of commercial paper, are

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Forex - Dollar get support from news Buffet 5bio in Goldman Sachs and extended Federal Reserve swaps lines to Central Banks.

The Dollar edged up for a second day on Wednesday, helped by the view that the credit crisis was not just a problem for the US economy and currency, but would spill over to the rest of the world. Testifying to the US Congress on Wednesday Federal Reserve Chairman Ben Bernanke urged immediate approval of the US Treasury's rescue proposal to thwa

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ECB's Orphanides Says Crisis' Repercussion on Economy "Intensifying"

Frankfurt - The impact on the economy from the ongoing financial crisis seems to be intensifying, with uncertainty a pronounced levels, European Central Bank Governing Council Athanasios Orphanides said.Despite the relative normalization of the climate in the financial environment, the repercussions on the global economy appear to be intensifying and continuing, Orphanides said in a statement published by the Central Bank of Cyprus. The degree of economic uncertainty is particularly pronounced and a further significant worsening of domestic

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