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German Chancellor Chastises Central Banks


German Chancellor Angela Merkel is warning that key central banks are being too aggressive and that their policies could lead to another financial crisis.

Ms. Merkel leveled the criticism at the U.S. Federal Reserve (U.S. central bank), the Bank of England and the European Central Bank during a speech on Tuesday, calling for them to return to what she called a "policy of reason."

She warned their current approaches could lead to another financial crisis in 10 years.

The Fed and the Bank of England have slashed benchmark lending rates to all-time lows while supporting large private banks in danger of failing.

During a hearing Wednesday in Washington, Federal Reserve Chairman Ben Bernanke said he respectfully disagreed with the chancellor and that he is "comfortable" with the Fed's actions.

Some economists have criticized the European Central Bank for not acting aggressively enough.

Meanwhile, the European Union's statistics office (Eurostat) issued more bleak data Wednesday.

Officials announced the gross domestic product (GDP) - a measure of all the goods and services produced in a region - for the 16 countries using the euro fell a record 2.5 percent for the first three months of the year.

Eurostat said Tuesday that the unemployment rate in the so-called eurozone spiked to 9.2 percent in April, the highest it has been in almost 10 years.


Some information for this report was provided by AP.

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