“We have shown today that we’re not short of ammunition,” said Mario Draghi. The President of the European Central Bank, though, used the bullets he had to shoot himself – and what remains of the global economic recovery – in the foot.
On Thursday, the ECB fired its “big bazooka”. Central bankers in Frankfurt, in yet another bid to get the moribund Eurozone economy moving, created even more virtually-printed money while pushing already negative interest rates down further.
The ECB’s main refinancing rate was lowered from 0.05pc to zero, while the deposit rate dropped from -0.3pc to -0.4pc. So Eurozone commercial banks will be charged more to lodge excess reserves at the central bank, apparently encouraging them to extend loans to firms and households.