Euro zone’s central bank will stay alarmed during the next year as US recession may affect the rebound of European economy. There are also concerns about the fiscal situations in some indebted euro-region nations.

As it was expected, European Central Bank President Jean-Claude Trichet announced that emergency lending measures for banks will remain up to 2011. The ECB will continue offering commercial banks unlimited one-week and one-month loans until at least January 18. In addition, in October, November and December the institution will propose banks 3-month loans at interest rates linked to the ECB’s average benchmark rate over the maturity of the loan.

Also in line with the forecast the ECB Governing Council decided to leave key interest rate 1% for a 17th month staying loyal to the loose monetary policy in order to help euro zone’s economy rebound.

In addition, euro area’s central bank increased its economic growth forecast from 1% to 1.6% in 2010 and from 1.2% to 1.4% in 2011. European economy will gain due to exports and domestic demand recovery.

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