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ECB says eurozone financial markets fragmented

February 16. 2013 2:26PM
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(AP) The European Central Bank warns that debt crisis hitting the 17 countries that use the euro is causing the region's financial market to become increasingly fragmented

The region's central monetary authority highlighted the fall-off in money being lent across borders and the differences in money-market and bond interest rates between financially stronger and more troubled countries in the region as signs of the split.

The bank's statement Wednesday expanded on comments by bank head Mario Draghi, who has said that the central bank can step in and help lower excessive interest rates under some circumstances. The bank has said it may buy government bonds to drive rates down, if countries first ask for help from Europe's bailout funds.

The ECB said crossborder loans in the overnight money market fell to 40 percent of the market earlier this year, from 60 percent in mid-2011.

Associated Press

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