ECB to help businesses, says top central banker

The European Central Bank is exploring ways to directly help small and medium-sized companies as a way to boost the recession-hit eurozone economy directly, said Benoit Coeure, a member of the bank's executive board. Coeure, speaking at a conference south of Paris, did not say how exactly the policy would work and stressed that the ECB would not intervene to replace "other actors" including struggling banks burdened by non-profitable assets. Coeure said the ECB "can only act within its mandate" and would not allow the transfer of private sector risk onto its balance sheet. Earlier this month, the ECB cut interest rates to a record low amid a chorus of calls for the eurozone to focus on growth and reverse 18 months of recession. But analysts believe that rate cuts have largely lost their ability to jumpstart the economy, forcing the ECB to come up with innovative ways to encourage business activity. ECB chief Mario Draghi said earlier this month that the central bank was coordinating with other European institutions in devising a strategy to stimulate businesses directly. A source close to the matter said the ongoing discussions could drag on for weeks with no policy proposals before September. "Injecting liquidity is something the central bank can do, but taking on actual credit risk is the remit of a development bank," the source said.