Will the ECB go toxic?

Published on 29 September 2010 at 09:34

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"This man is a risk to your money,” dramatises Focus. "This man" is European Central Bank (ECB) president Jean-Claude Trichet. According to the free-market-geared German magazine, interest rates are primed to explode again because the central banks are jeopardising prosperity in their countries by keeping the rates artificially low. Focus wonders whether the ECB might eventually turn into a “toxic bank”, seeing as it is offering very cheap loans, investing huge sums in bonds from heavily indebted states and bailing out private banks. So, suggests Focus, Trichet should "start recouping the money disbursed during the crisis by raising interest rates".

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