ECB boss Trichet reveals safety net to be extended

Published on Wednesday 1 September 2010 21:30

The European Central Bank has extended its liquidity safety net for vulnerable eurozone banks into next year, delaying its exit from crisis measures as it yesterday urged caution about economic recovery.

The ECB also left interest rates at a record low of 1 per cent for the 16th month in a row and said policy remained accommodative as the region battles with an uneven recovery and concerns about bank vulnerability.

Although ECB staff raised growth forecasts, president Jean-Claude Trichet said risks were to the downside and the recovery would be moderate with uncertainty prevailing. "We have to remain cautious and prudent. We don't declare victory," he told his monthly news conference, although he said a double-dip recession was not on the cards.

The ECB extended its promise to lend banks unlimited one-week and one-month funds until at least 18 January.