Breaking News, World News and Taiwan News.

Central banks reach for their guns over Greek vote

FRANKFURT/LONDON -- Central banks from Tokyo to London checked their ammunition on Friday in preparation for any turmoil from Greece's election, with the European Central Bank (ECB) hinting at an interest rate cut and Britain set to open its coffers.

ECB President Mario Draghi said his bank was ready to step in and fund any viable eurozone bank that gets in trouble, and painted a picture of a deteriorating economy with no inflation danger — conditions for monetary easing.

“There are serious downside risks here,” Draghi told the annual ECB Watchers conference in Frankfurt, two days before a Greek vote that could set Athens on a path out of the eurozone and stoke turmoil in financial markets.

“This risk has to do mostly with the heightened uncertainty.”

Japan's top financial diplomat Takehiko Nakao warned that authorities in Tokyo would respond to unwelcome currency moves as appropriate, a clear threat of intervention if investors seeking safety push the yen too high.

The Bank of England followed up on Thursday's joint announcement with the government of a 100-billion-pound (US$155 billion) offer of loans to banks by saying it will start next week with a charge of just 0.75 percent.

Officials from the G-20 nations, whose leaders are meeting in Mexico next week, say numerous central banks are preparing to take steps to stabilise financial markets — if needed — by providing liquidity and prevent any credit squeeze.

European Council President Herman Van Rompuy convened a conference call on Friday afternoon with the leaders of Germany, France, Italy and Britain, officially to discuss preparations for the G-20 summit, expected to be dominated by the eurozone debt crisis.

Depending on the depth of any turmoil, an emergency meeting of ministers from the Group of Seven developed nations could be held on Monday or Tuesday during the summit in Los Cabos, Mexico, sources said.

The focal point for all is Sunday's repeat general election in Greece, a knife-edge race that could be won by parties vowing to tear up the harsh economic terms that the European Union and International Monetary Fund imposed as conditions of a bailout for the near-bankrupt state.

Write a Comment
CAPTCHA Code Image
Type in image code
Change the code
 Receive China Post promos
 Respond to this email
WSJA
Subscribe  |   Advertise  |   RSS Feed  |   About Us  |   Career  |   Contact Us
Sitemap  |   Top Stories  |   Taiwan  |   China  |   Business  |   Asia  |   World  |   Sports  |   Life  |   Arts & Leisure  |   Health  |   Editorial  |   Commentary
Travel  |   Movies  |   TV Listings  |   Classifieds  |   Bookstore  |   Getting Around  |   Weather  |   Guide Post  |   Student Post  |   English Courses  |   Terms of Use  |   Sitemap
  chinapost search