European Central Bank shifts gears

FRANKFURT, Germany, Oct. 17 (UPI) -- By cutting lending rates Oct. 8, the European Central Bank signaled its focus on inflation had shifted to restoring calm to financial markets.

In its previous monetary policy move in July, the ECB raised its bench rate to 4.25 percent, the International Herald Tribune reported Friday.

The rates were raised the same month crude oil prices hit a record of more than $147 per barrel.

October's rate cut was made in conjunction with cuts at central banks in England, Canada, Sweden, Switzerland and the United States.

The 10-year-old bank's single mandate is to keep prices under control, the Herald Tribune said. But, recent moves are the realization that the financial crisis was too critical to ignore, an analyst said.

"I see them as someone who had a loss-making position for a long time and finally closed it out," Thomas Mayer, chief Europe economist at Deutsche Bank in London told the newspaper.

In September, ECB President Jean-Claude Trichet gave notice that the financial crisis could not be ignored. "We have a responsibility as regards liquidity providing," he said.

But, he said, "we have no responsibility as regards the solvency issue that might emerge here and there."