The former president of the European Central Bank also told CNBC the shutdown signals "enormous difficulty" for the nation's democratic processes.» Read More
European Central Bank head Jean-Claude Trichet said on Monday that financial markets were experiencing an "ongoing correction" and repeated that the G7 was concerned about excessive dollar volatility.
European Central Bank President Jean Claude Trichet warned on Monday that the end of the credit crunch was not yet in sight and the world was experiencing an "ongoing and very significant market correction."
The European Central Bank left its key interest rate unchanged at 4 percent on Thursday, as widely expected, and its president Jean-Claude Trichet warned on inflation pressures.
The European Central Bank will most likely do on Thursday what it has done every month since the credit crunch started last August: keep rates steady and talk tough on inflation.
The euro cannot replace the dollar as the world's main reserve currency, and a system of two reserve currencies would be unstable, billionaire investor George Soros said on Thursday.
The European Central Bank kept rates on hold at 4 percent, as expected, on Thursday, sticking to its mandate to fight inflation at any cost. Economists now think the possibility of monetary easing is more likely as late as the fourth quarter.
Wall Street banks are the first to be blamed for the credit crunch. Central banks come a close second, but as the Federal Reserve's image is suffering, the European Central Bank looks as solid as a rock.
The European Central Bank's mission to fight inflation prevents it from worrying about economic weakness. But an abrupt slowdown could anger politicians and endanger the central bank's very mandate.
A look at the data and happenings that shaped the first quarter for European businesses and markets.
After a dismal first quarter, investors look forward to what the spring has in store; but apart from a new gold rush and the euro rising further, there seems to be little to anticipate.
The central banks of Britain and Switzerland added extra funds to ease pressure on high interbank lending rates on Thursday, while the European Central Bank said it was ready to step in with extra cash.
Top central bankers warned on Wednesday there was no end in sight yet to the global credit crunch as German banking giant Deutsche said the crisis threatened its profit target for this year.