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Also Thursday, the head of the European Central Bank, Jean-Claude Trichet, hinted that the bank might again buy bonds of Europe’s most financially troubled governments in an attempt to calm markets, the AP reported.
The bank also offered more emergency credit to banks, and indicated there was a greater chance that an interest rate hike once expected in October would be put off.
Concern on Wednesday focused on Italy, whose sheer size — it is the world’s seventh-largest economy — makes it potentially too big to bail out and would require radical new steps from already reluctant European leaders and the European Central Bank to prevent a full-blown crisis there. The day also saw volatile trading in the bonds of Belgium and even France as fears grew that Europe may be forced into a costly rethink of how to preserve its common currency, the euro.
The bank also offered more emergency credit to banks, and indicated there was a greater chance that an interest rate hike once expected in October would be put off.
Concern on Wednesday focused on Italy, whose sheer size — it is the world’s seventh-largest economy — makes it potentially too big to bail out and would require radical new steps from already reluctant European leaders and the European Central Bank to prevent a full-blown crisis there. The day also saw volatile trading in the bonds of Belgium and even France as fears grew that Europe may be forced into a costly rethink of how to preserve its common currency, the euro.
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