Bankers v mattresses
IN JUNE of last year the European Central Bank reduced its benchmark interest rate, at which it lends to commercial banks, to 0.15% and its deposit rate, which it pays to banks on their reserves, to -0.1%. For a central bank that was once cautious about unconventional measures, setting a negative interest rate was a bold move.
http://www.economist.com/news/finance-and-economics/21679231-central-banks-are-still-testing-limits-how-low-interest-rates-can-go-bankers
IN JUNE of last year the European Central Bank reduced its benchmark interest rate, at which it lends to commercial banks, to 0.15% and its deposit rate, which it pays to banks on their reserves, to -0.1%. For a central bank that was once cautious about unconventional measures, setting a negative interest rate was a bold move.
http://www.economist.com/news/finance-and-economics/21679231-central-banks-are-still-testing-limits-how-low-interest-rates-can-go-bankers
Everything is a reaction of the European Central Bank after to many requests (to not tell critics) from most of the countries of Eurozone about the aims that must have the monetary policies created and decided by this Central Bank and applied in every country of Eurozone. Before the above decisions the main aim of European Central Bank is to hold under control the inflation in Eurozone by penalizing in this way the economic growth in every country. This make possible the increase of the weight of the debt and low figures in economic growths in almost all the Eurozone countries. Seeing this situation and hearing the voices of the members the above bank changed the course and begin to stimulate the economic growth decreasing gradually all the kind of interest. Hoping that will stimulate the growth and the being more healthy for every economy of every member of Eurozone. That's the reason of the above rates that seems a little exaggerated or even strange but are not the only case which is verified. At least I remember one similar case: time ago (not to much) Central Bank of Germany applied negative interest rates. Aimed mainly to put out of the commercial banks all the possible money. In order that to be worked and make profit, employment and economic growth.
