The European Central Bank has lowered interest rates with 75 basis points to 2.50%. This is the largest rate cut in its history, though it must be noted that the bank is only 10 years old.

The primarly objective of the ECB is to maintain price stability. Because of the fast dropping oil prices, inflation has dropped significantly over the last two months, giving the ECB the opportunity to stimulate the economy by lowering interest rates. The question remains if the new rates will stimulate banks to fulfill its vital function within an economy, and start lending money to businesses that want to invest.