German Chancellor Angela Merkel on Thursday waded into the debate on whether the European Central Bank should cut its key interest rates by noting that there were drawbacks to keeping rates perennially low. "We also see that there's a negative to low interest rates, for insurance customers and savers," Merkel told a banking conference in Dresden. "The ECB has the difficult task of setting an interest rate that meets the needs of all countries," she said.

FRANKFURT (Reuters) - There is no general shortage of securities that banks have to deposit at the European Central Bank when they borrow money from it, the central bank said on Wednesday. Some economists have expressed concerns that a shortage of collateral could have a negative effect on bank lending, but ECB policymakers have said in the past that tighter collateral conditions tend to exist only in parts of the bloc struggling most with the debt crisis.

By Paul Carrel and Andreas Framke FRANKFURT (Reuters) - The European Central Bank is closer to lowering interest rates than at any time since it last cut them in July 2012 and is likely to shave a quarter-point off at its policy meeting next week. Senior sources involved in the deliberations say momentum is building for action to help a euro zone economy which has slipped back into recession, a move that some policymakers wanted to take earlier this year.

WASHINGTON (Reuters) - The European Central Bank could cut interest rates further, if data justified such a move, but the effectiveness of rate cuts is limited because they are not passed on to the economy in the same way in all parts of the euro zone, ECB board member Joerg Asmussen said. Responding to a question in a panel on the sidelines of the International Monetary Fund annual spring meeting, Asmussen said ECB monetary policy was already very accommodative. The bank's main lending rate is at a record low of 0.75 percent.