Wanna play? schreef op 14 mei 2014 12:28:
The European Central Bank is preparing a number of measures, including a negative rate on bank deposits, to address low inflation in the euro zone, the central bank's top economist said Wednesday.
"Negative deposit rates are a possible part of a combination of measures," Peter Praet, ECB executive board member, told German newspaper Die Zeit in an interview.
"We are preparing a number of things," he added, citing interest rate cuts or further bank refinancing operations.
No central bank as large as the ECB has experimented with a negative deposit rate--the ECB's rate is currently zero--which would effectively penalize banks for parking surplus funds at the ECB.
Such a move would likely cheapen the euro as international investors cast a more wary eye on euro-denominated assets, though it could also spur banks to try to recoup the extra costs from their customers, which may damp lending.
Mr. Praet didn't share such fears in the interview. "With the orders of magnitude we are talking about, I do not expect that to happen," he said.
The ECB's top economist also indicated he didn't expect the ECB to launch a large scale asset purchase program modeled after the U.S. Federal Reserve.
"I think that this would only come when the economy and inflation in the euro zone as a whole are much worse than we expect," Mr. Praet told Die Zeit.
The ECB has been battling concerns that inflation in the euro zone continues to be dangerously low. Inflation in the 18-nation single-currency bloc was 0.7% in April, well below the European Central Bank's target of just under 2% over the medium term, building pressure on the ECB to consider additional stimulus measures.
Earlier this month, ECB President Mario Draghi signaled that the central bank would likely cut interest rates or take other stimulus measures in June to combat low inflation. "The governing council is comfortable with acting next time," at its next meeting June 5, he said.
He added a caveat that the ECB first wants to see its own staff projections for inflation, which come out next month.
Germany's central bank also signaled this week that it stands ready to back an array of stimulus measures from the ECB in June, if necessary, to keep inflation from remaining too low. The ECB staff inflation projections for 2016 will be central to the Bundesbank's decision, a person familiar with the matter told The Wall Street Journal.
Newspaper website:
www.zeit.de