Tags: Ross | ECB | stimulus | central bank

Wilbur Ross: ECB's Stimulus Plan 'Will Work'

By    |   Friday, 06 June 2014 10:33 AM

Star investor Wilbur Ross, CEO of WL Ross & Co., stands impressed with the bold stimulus program announced by the European Central Bank (ECB) Thursday.

"I think it's a very interesting experiment [negative interest rates], and I think it will work," he told CNBC.

The package includes a cut in the ECB's deposit rate for banks to minus 0.1 percent, a 10-basis-point reduction in its benchmark rate to 0.15 percent and a 400-billion-euro ($542 billion) lending facility for banks.

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"The idea of negative interest rates: finally some big central bank has done it," Ross said. "It was tried earlier in Denmark, and it seemed to work fairly well there. This is the first time a big-time central bank has done it."

Ross recently invested in Eurobank of Greece. "That was our first foray into Greece, and I'm fairly sure it [the ECB easing program] is going to be very helpful to them."

The ECB's measures make Ross more eager to invest again in Europe, he said. "The more things that [ECB President Mario] Draghi has done to put a floor under how bad things can get, the safer it is to invest."

Not everyone believes the ECB action will be a game changer.

The central bank "has thrown in the kitchen sink to signal this is an empathic response," Ken Wattret, an economist at BNP Paribas, told The Wall Street Journal. But, "I'm not convinced this will be sufficient to alter the trajectory of inflation," he said.

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Star investor Wilbur Ross, CEO of WL Ross & Co., stands impressed with the bold stimulus program announced by the European Central Bank (ECB) Thursday.
Ross, ECB, stimulus, central bank
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2014-33-06
Friday, 06 June 2014 10:33 AM
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