Rates of the ECB

Link to source data from the ECB

The European central bank rate in all it's glory. Although these rates get a little confusing as central banks tend to have two or three different ones, this headline rate is the minimum at which they'll lend to banks in return for "financial assets", like bonds or gilts etc, in technical jargon this is known as a repo (repurchase) agreement. There's a helpful explanation of the process here, on the ECB's website.

The claim often made about eurozone interest rates is that they were held too low for too long and that this lowness was directly responsible for the boom and subseqent bust that Europe is now suffering. The first statement is fairly easy to test, the historical average rate of interest is around 5% so yes, compared to this rates were indeed low. What's not so simple to answer is whether this deviation from the norm was responsible for Europe's financial chaos. The ECB's rate of interest was uniform across the zone yet some countries clearly suffered more than others, this indicates that there are other factors at work. The widespread corruption and tax avoidance in Greece for example would have crippled her economy whatever the ECB did, in fact higher rates could have just compounded the problems by saddling the Greeks with an unfavorable exchange rate and higher systemic banking costs.

 Rather than laying the blame at the door of the ECB and bankers in general, perhaps attention could be shifted to the politicians that set the rules of national and personal investment. In the right hands low IRs could be a major boon the nation's wealth, in the wrong ones it becomes another speculative instrument that only fuels inflation.