European Central Bank leaves refi rate at 1% (by William L. Watts)

FRANKFURT (MarketWatch) -- The European Central Bank on Thursday left its key lending rate, the refi rate, unchanged at a record low 1%. The decision was widely expected. ECB President Mario Draghi holds his monthly news conference at 2:30 p.m. Frankfurt time, or 8:30 a.m. Eastern.

ECB's Draghi: EU recovery to be gradual (by Kim Hjelmgaard)

LONDON (MarketWatch) -- The euro-zone economic recovery is going to be very gradual, Mario Draghi, the president of the European Central Bank, said in a monthly news conference in Frankfurt on Thursday. The ECB growth forecast for the euro zone is between -0.5% and 0.3 % in 2012, Draghi said. Inflation will stay above 2% in 2012, he said. The region's outlook was subject to downside risk related to increases in energy prices. An ECB survey on bank lending showed a modest pickup in lending since the first LTRO in December, Europe's top central banker said, noting that the first two LTROs have had a "powerful" yet complex effect and that there are "many complexities that need to be analyzed." An LTRO is a long-term funding operation available to European banks. Draghi declined to comment on a question from a journalist related to the Greek debt-swap deal.

ECB's Draghi: 'nonstandard measures temporary' (by Kim Hjelmgaard)

LONDON (MarketWatch) -- European Central Bank President Mario Draghi said in his monthly press conference in Frankfurt on Thursday that the central bank's long-term refinancing operation, or LTRO, has had a positive effect on markets and sentiment in the euro zone but that "all nonstandard measures are temporary." He also said that the three-year LTROs have been an "unquestionable success." Last week, the special-funding operation saw 800 banks in Europe take out $700 billion in three-year loans. Earlier Thursday the ECB decided to keep interest rates on hold at 1%. The Bank of England also kept interest rates on hold Thursday and made no changes to its quantitative-easing program, whereby it increases the money supply by purchasing government bonds and other securities. The ECB held its first LTRO in December last year.

Draghi: EU banks using 'avatars' for LTRO (by Kim Hjelmgaard)

LONDON (MarketWatch) -- European Central Bank President Mario Draghi said Thursday that some European banks are using "avatars" when making use of the central bank's long-term funding operation known as LTRO. An avatar is a term mostly used in video games that refers to graphical representations of a user's online or virtual identity. Draghi effectively suggested that some banks hid their borrowing needs in the December and February LTROs. However he also said that LTROs "removed the tail risk from the environment" and that the onus was now on governments and banks. This could be interpreted as a sign that a third LTRO is not imminent.