BANKING & FINANCE - Feb. 2, 1996

Germany, France Cut Interest Rates: The Bundesbank again cut its key money market rate, reducing it to 3.30% from 3.40%, one day after shaving the rate from 3.55%. The Bank of France lowered its intervention rate, the “floor” rate for French short-term rates, to 4.05% from 4.20%. The moves came a day after the U.S. Federal Reserve Board cut its key interest rates for a third time in six months. All mark an effort by central banks worldwide to prevent economies from slipping into recession. Economic growth in Europe has all but ground to a halt, stifled by European currencies’ appreciation against the dollar, wage increases and businesses’ flight to lower-cost countries. Economists said the cuts, coupled with recent reductions in Netherlands, Belgium and Austria, will stimulate business activity and help move Europe toward economic targets required for adoption of a common currency.