Central banks 'cutting borrowing costs'

28 November 2011

Central banks across the world are cutting their borrowing costs in order to avoid the ongoing eurozone debt crisis from evolving into a global financial downturn.

According to estimates made by JPMorgan Chase & Co, institutions such as the Bank of England, the Federal Reserve and the European Central Bank (ECB) could all implement further quantitative easing, Bloomberg reports.

These central banks have all bolstered monetary stimulus over the course of the last three months or so and it is expected that several other nations worldwide - such as Sweden and Mexico - will do the same before the end of the first quarter of 2012.

Eric Stein, co-manager of the Eaton Vance Global Macro Absolute Fund in Boston, told the news source that such institutions are currently characterised by a "backdrop of austerity".

"We've seen central banks that were hawkish begin to turn dovish," he added.

Sources recently told Reuters that the ECB is planning to offer extended loan arrangements to financiers across the continent.

By Asim Shah

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