ECB’s Mersch warns against hasty reactions in response to the liquidity crisis. Mersch warned governments that any regulatory changes should not be implemented too quickly and ahead of more research into the mechanism of the crisis and the importance of liquidity, which may have been too much for granted. Mersch also said that core inflation remains too high and repeated that it is important to avoid second-round effects, which suggest that the ECB is not contemplating rate cuts despite the crisis. Separately ECB’s Nowotny said the main effect of the U.S. Bank crisis will be an “expected cooling of the economy”, but suggested that the ECB is already reacting to this by injecting extra liquidity, which confirms that a rate cut as a response to the crisis is unlikely.