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.
“We will look at all the incoming data and stand ready to act if needed,” Draghi said at a press conference in the Slovakian capital after the ECB cut its key rate by a quarter point to 0.5 percent. Asked if further action could include taking the deposit rate negative from its current level of zero, he said: “We will look at this with an open mind.”
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