A turning point has been reached

Sweden's central bank has lowered its prime interest rate even more than the ECB - from 3.75 to 2.0 in one go. This time the bank did the right thing after having actually increased the interest rate only a few months ago, writes the Stockholm daily Dagens Nyheter: "The Riksbank is taking drastic action. Director of the bank Stefan Ingves points out that it would be riskier to sit back and wait than to take strong action now. This is the right attitude in the present situation. Unusual measures are required. ... The financial crisis has led to the money market policy losing its power. Sinking the prime interest rate has had little or no impact and banks are more stringent in granting loans. The credit market is not yet functioning normally, but the acute phase has passed and a turning point has been reached."

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