ECB Unveils Historic Measures

To fight deflation, European Central Bank became first major central bank to charge, rather than pay, banks for parking cash with it.

Mario Draghi is betting that the banking system, rather than the bond market, is his best ally for now in the fight against deflation.

Acting in a more sweeping fashion than most investors anticipated, the European Central Bank (ECB) today cut interest rates to unprecedented lows, and its president unveiled measures to beef up lending for banks in a bid to revive inflation languishing at close to a quarter of his target.

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