ECB interest rate cut unlikely at Jean-Claude Trichet's final meeting

The European Central Bank is likely to help banks with new credit but is not expected to cut interest rates on Thursday, when Jean-Claude Trichet chairs his last monthly news conference before stepping down as president.

Tensions in financial markets have heightened this week on concerns that some banks will take heavy losses on government bonds from countries like Greece. The uncertainty means banks lend less to each other for fear of not getting paid back. That could hurt the real economy by limiting the flow of loans to businesses and households, as happened in 2008.

Economists think that to avoid such a lending squeeze, the ECB's 23-member governing council could announce new credit offerings to banks, such as unlimited amounts of six-month or one-year loans.

Experts don't rule out an interest rate cut to stimulate growth, but consider it less likely as inflation is still uncomfortably high.