Bank protests may spark ECB depo rethink

摘要

Bank protests over negative deposit rates may lead the European Central Bank to reconsider further cuts at its upcoming meeting on March 10, according to sources close to the situation. As European policy-makers wrestle with the prospect of inflation remaining persistently below target, analysts have debated a range of options, including expanding quantitative easing, following Japan's example of tiered bank deposit rates and cutting the ECB's overnight rate further from the current -0.3%. The negative overnight deposit rate is unpopular among banks, which in many cases have been unable to pass on the cost to customers. Some have argued that the rate is counter-productive, causing them to raise customer rates to help pay the charge. Banks have lobbied hard in Brussels for the central bank to desist from further cuts.