The European Central Bank (ECB) announced on Thursday March 16 a new rate hike of half a point to fight inflation.
The announcement comes amid turmoil in the banking sector: On Wednesday, the share price of the bank Credit Suisse collapsed, leading to sharp declines in banking stocks in Europe. On the night of Wednesday to Thursday, Credit Suisse announced a loan of 50 billion francs from the SNB. The bank, at the same time, mentioned a series of debt buyback operations for around 3 billion Swiss francs.
These announcements visibly reassured investors: Thursday, European stock markets rebounded Thursday at the opening after their plunge the day before.
The ECB’s interest rates are now in a range between 3% and 3.75%, while the stock market tremors that have been affecting the banking sector for several days could have prompted it to moderate its turn of the screw. “The euro area banking sector is resilient and has strong capital and liquidity positions”assures the ECB.
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