ECB cuts interest rates again
The European Central Bank cut interest rates again today on troubling financial data, including Deutsche Bank's profit warning. But Stephen Beard reports the move is not offering the markets much reassurance.
European Central Bank President Jean-Claude Trichet delivers a speech in front of members of the European parliament -- January 13, 2009. (Patrick Hertzog/AFP/Getty Images)
More on International, Europe, America's Financial Crisis
TEXT OF STORY
Bob Moon: The European Central Bank cut interest rates by half a percentage point to 2 percent this morning. From London, Marketplace's Steven Beard reports that's not offering the markets much reassurance.
Stephen Beard: The banks are in trouble, and we're not just talking about the woes of Citigroup and Bank of America. Some of Europe's biggest financial institutions are reeling.
This week, the bad news has been unremitting. The profit warning from the mighty Deutsche Bank sent shock waves across the continent. So did the forecast that HSBC will need a cash injection of $30 billion. Further big job losses at Barclays have piled on the misery.
David Buik of the BGC group says all this is having a predictable effect on bank shares:
David Buik: We've seen in a period of just over a week valuations of these banks right across the spectrum and right across the world fall dramatically. There is a perception overall now, I'm afraid, that the banking sector does require fresh capital.
And he says with investors scrambling to get out of bank shares, that capital will almost certainly have to come from taxpayers.
In London, this is Stephen Beard for Marketplace.
Comments
Comment | Refresh
Post a Comment: Please be civil, brief and relevant.
Email addresses are never displayed, but they are required to confirm your comments. All comments are moderated. Marketplace reserves the right to edit any comments on this site and to read them on the air if they are extra-interesting. Please read the Comment Guidelines before posting.
You must be 13 or over to submit information to American Public Media. The information entered into this form will not be used to send unsolicited email and will not be sold to a third party. For more information see Terms and Conditions and Privacy Policy.