July 03, 2009

European Central Bank President Jean- Claude Trichet is urging the region’s banks to play their part in generating an economic recovery.Trichet yesterday said financial institutions should pass onto the “real economy” the 442 billion euros ($619 billion) it granted them June 24 and said the ECB has no immediate plans to ramp up its response to the crisis. He spoke to reporters after keeping the ECB’s main rate at a record low of 1 percent.

“The ball was played back to the banking system,” said Carsten Brzeski, an economist at ING Groep NV in Brussels. “The ECB has now released the accelerator and switched to cruise control.”The ECB has been pumping unlimited funds into the financial system since October and banks will get even more cash next week when it starts buying 60 billion euros of covered bonds.