Tag Archives: LTRO

A Bad Idea Returns: Negative Deposit Rates

Posted on December 2, 2013 by macrohart

As ECB policy rates skirt the zero bound, expectations for the use of alternative tools, such as negative deposit rates are again on the rise. However, this is  an ineffective and potentially harmful policy option. Several problems may arise: transmission across other … Continue reading →

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Life at 0%: What’s Next for the ECB?

Posted on July 25, 2012 by macrohart

The reduction of the ECB’s deposit rate to 0% led to an immediate Eur500 mn drop in deposit holdings but prompted a simultaneous increase in  current account holdings, leaving overall bank reserves unchanged. Yet, focus on these figures is misplaced: … Continue reading →

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