8 OCTOBER 2008 - BUSINESSEUROPE WELCOMES TODAY’S 50 BASIS POINTS INTEREST RATE CUT BY THE ECB
TODAY’S CONCERTED INTEREST RATE CUT WAS THE RIGHT DECISION
In a context of intensifying financial market turbulence, declining inflation and growing uncertainties about economic prospects, BUSINESSEUROPE welcomes today’s 50 basis points interest rate cut by the ECB, concerted with six other major central banks. This joint intervention shows that the ECB and its counterparts across the world will take all necessary actions to contain the ongoing crisis. This sends a message of confidence not only to financial markets and banks but more importantly to companies and citizens.
It is particularly welcome that coordinated measures have been taken, highlighting that central banks are ready to take collective responsibility. We expect a similar commitment on the part of European Heads of State and Government at their next meeting in Brussels on 15-16 October.
European governments must send an unambiguous signal for a coordinated European approach. More transparency and better coordination of market supervision, deposit guarantees and bailout plans are vital at present.
Regulation should be strengthened where needed, also taking into account the acceleration of an integrated financial European financial services market. In addition policy-makers also need to seriously consider amending fair value accounting rules for assets where market liquidity has evaporated and agree on adapted rules concerning rating agencies to resolve conflicts of interest.
Ernest-Antoine Seillière, president of BUSINESSEUROPE said: “We have two reasons to be satisfied by today’s decision: lower interest rates and the concerted action of the major central banks. This is the right decision to restore confidence.”