Thursday, November 03, 2011
A swift ECB reversal
Posted by David Smith at 02:15 PM
Category: Thoughts and responses

Just a few months ago the European Central Bank appeared to be the only advanced country central bank appropriately concerned about inflation. Now, three months after the eurozone crisis broke violently back out into the open, it has cut its main refinancing rate from 1.5% to 1.25%.

The decision, at the first meeting to be chaired by its new president Mario Draghi, was welcome. But, just as in 2008, the ECB has found itself wrongfooted by events. However, as its new president has said, the big decisions now lie with governments.