16 March 2023 at 14:18 The European Central Bank defies the banking crisis – raises the interest rate by 0.5 percentage points As announced, the European Central Bank (ESB) raised the interest rate by 0.5 percentage points to 3.5 percent. This is happening despite great turmoil on the financial market. Several were unsure in advance whether the ECB would carry out the interest rate hike in light of the bank collapses in the US and the problems of the major bank Credit Suisse. The goal of recent interest rate increases has been to overcome price inflation, which is the ECB’s main task. At the same time, the bank also has responsibility for financial stability. As a result, ECB chief Christine Lagarde must balance the austerity measures so that increased interest rates do not add up to what already looks like an incipient financial crisis. The US central bank faces the same challenge when it holds its interest rate meeting next week. (NTB)
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