Peters: ECB is stuck in monetary policy crisis mode
“Once again, the ECB has failed to begin its withdrawal from negative interest rates. That’s disappointing. Measures should have been put in place long ago to ease the burden on European banks – like those taken from the outset by the central banks in Japan and Switzerland. We’re therefore calling for the introduction of an exemption threshold,” said Hans-Walter Peters, President of the Association of German Banks, commenting on today’s meeting of the ECB Governing Council.
“With its negative interest rates, the ECB is stuck in monetary policy crisis mode, especially since it indicated six weeks ago that the negative deposit rate would remain in force until at least 2020. It’s unacceptable that the ECB is the only major central bank in the world not to have at least mitigated negative interest rates by granting an exemption threshold for excess liquidity. Last year this ‘special tax’ on surplus reserves cost European banks around 7.5 billion euros. And every month the ECB puts off easing this burden adds a good 600 million euros to the bill for banks in the eurozone.”