ECB Eyes Negative Deposit Rate

After the central bank cuts benchrate rate to record low, Draghi suggests that it could shift to charging banks for overnight deposits.

European Central Bank President Mario Draghi opened a new front in the battle against the debt crisis after cutting the benchmark interest rate to a record low today.

Speaking in Bratislava, Draghi signalled that officials may take the unprecedented step of charging banks to park excess cash with the ECB overnight and that another reduction in the main rate is possible.

‘Unintended Consequences’

Denmark is currently the only country in Europe with a negative deposit rate.

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