European finance ministers made few concessions to break a deadlock on a bank-failure bill, as the European Central Bank warned that failure to enact it would hinder efforts to combat fragmentation of the financial sector.
The appointment of Chrystalla Georghadji to replace outgoing Central Bank of Cyprus Chief Panicos Demetriades will help heal a rift between the central lender and the government, a former governor at the bank said.
The European Central Bank will keep interest rates low as the economy picks up because the region’s economic output is still below potential, according to Executive Board member Sabine Lautenschlaeger.
Investors are accepting the lowest yields on German bunds relative to Treasuries in more than seven years as the European Central Bank nourishes the euro-area recovery with a pledge to keep interest rates subdued.
Central banks employing forward guidance risk creating financial instability by revising the policy or keeping borrowing costs low for too long, according to economists at the Bank for International Settlements.