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The European Central Bank stuck to a planned interest rate increase Thursday as it remained laser-focused on battling sky-high inflation despite market turmoil over fears of a widening banking crisis.
The bank raised interest rates by half a percentage point, its sixth successive hike — but it notably omitted language from its statement about the need to raise rates “significantly” going forward.
Policymakers had faced calls to slow their aggressive hiking campaign after the collapse of Silicon Valley Bank and Signature Bank in the United States, the sector’s biggest failures since the 2008 financial crisis.
Fears of contagion have spread to Europe, with a market rout forcing Credit Suisse to tap a financial lifeline from the Swiss central bank.
After its share price crumbled on Wednesday, Switzerland’s second biggest bank, already battling multiple scandals, sought to stave off the latest crisis by announcing it would borrow up to $54 billion from the country’s central bank.
Credit Suisse shares leap 35% as markets cheer lifeline
Its shares soared more than 30 percent at the open Thursday, and European stocks rebounded slighlty.
But US and European markets wobbled after the Frankfurt-based ECB, the first major central bank to meet since the banking turmoil began, stuck to its guns on interest rates.
