Europe's monetary authorities are thinking about measures to be taken against possible side-effects of negative interest rates. The European Central Bank (ECB) will continue to monitor how banks in the current interest-rate environment, healthy output conditions to maintain said ECB President Mario Draghi on Wednesday at a conference in Frankfurt.
"If necessary, we need to think about possible measures to obtain the favorable impact of negative interest rates for the economy and at the same time, any side effects can mitigate," said Draghi.
He stressed at the same time: "However, the low profitability of banks is not an inevitable consequence of negative interest rates."
key rate to record low
money-many banks earn in the current low interest rate environment is difficult. The institutions Parking money at the ECB, you have to pay for it even 0.4 per cent penalty interest. The Central Bank had moved in its most recent interest rate meeting three weeks ago, the first increase in interest rates at least until the year 2020. Your interest rates don't want to touch them now until at least the end of the year. So far, this was only planned to over the summer. So Draghi in his eight years in office, which expires in October, not a single Mail could have raised interest rates.
Thus, the key interest rate will remain longer than previously expected at a record low of zero percent. At the same time, the ECB commercial banks is once again offering longer-term loans at particularly favourable conditions, what is the financial industry. With the liquidity injection, you want to encourage the institutions to increase lending to the economy.
Draghi stressed that the ECB still have plenty of potential to respond to potential new risks: "There is a lack of instruments to fulfil our mandate." The main objective of the ECB is the inflation rate in the medium term at just below 2.0 per cent to anchor far enough away from the zero mark.
interest turning more to the rear of the slide
The ECB would be ready in the case of a stronger downturn in the economy, the turnaround in interest rates to move further to the rear. The Central Bank would ensure that monetary policy and said the economy is under restraint by adjusting its interest rate Outlook, Draghi.
The Central Bank see in the meantime a more lasting deterioration of the demand from outside the Euro-Zone. The demand within the Euro area but continue to be robust. A slowdown does not point necessarily to a serious break-down, said the Italian. (ij/sda)
Created: 27.03.2019, 10:34 PM