Negative interest rates, excess reserves and tiering of the ECB: How heavily are banks burdened?
Abstract The European Central Bank (ECB) reduced its deposit rate into negative territory in June 2014. It has been reduced further in several steps to reach today’s level of −0.5%. Banks are increasingly facing problems investing their deposits without taking great risks and avoiding nominal deprec...
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2020-05-01
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| Series: | Wirtschaftsdienst |
| Online Access: | https://doi.org/10.1007/s10273-020-2658-7 |
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doaj-73b06e0e54064b5c854bf5af8d3b864e2021-05-23T11:23:34ZdeuSpringerWirtschaftsdienst0043-62751613-978X2020-05-01100537437910.1007/s10273-020-2658-7Negative interest rates, excess reserves and tiering of the ECB: How heavily are banks burdened?Jens Klose0FB Wirtschaft | THM Business School, Technische Hochschule MittelhessenAbstract The European Central Bank (ECB) reduced its deposit rate into negative territory in June 2014. It has been reduced further in several steps to reach today’s level of −0.5%. Banks are increasingly facing problems investing their deposits without taking great risks and avoiding nominal depreciation. This article shows, however, that the deposit rate has never been the effective lower bound for deposits at the ECB and, moreover, the decision in September 2019 to introduce the tiering programme increased the average deposit rate rather than decreased it as one would have supposed. With this programme, the ECB has relaxed the situation, even though banks in the euro area make different gains.https://doi.org/10.1007/s10273-020-2658-7 |
| collection |
DOAJ |
| language |
deu |
| format |
Article |
| sources |
DOAJ |
| author |
Jens Klose |
| spellingShingle |
Jens Klose Negative interest rates, excess reserves and tiering of the ECB: How heavily are banks burdened? Wirtschaftsdienst |
| author_facet |
Jens Klose |
| author_sort |
Jens Klose |
| title |
Negative interest rates, excess reserves and tiering of the ECB: How heavily are banks burdened? |
| title_short |
Negative interest rates, excess reserves and tiering of the ECB: How heavily are banks burdened? |
| title_full |
Negative interest rates, excess reserves and tiering of the ECB: How heavily are banks burdened? |
| title_fullStr |
Negative interest rates, excess reserves and tiering of the ECB: How heavily are banks burdened? |
| title_full_unstemmed |
Negative interest rates, excess reserves and tiering of the ECB: How heavily are banks burdened? |
| title_sort |
negative interest rates, excess reserves and tiering of the ecb: how heavily are banks burdened? |
| publisher |
Springer |
| series |
Wirtschaftsdienst |
| issn |
0043-6275 1613-978X |
| publishDate |
2020-05-01 |
| description |
Abstract The European Central Bank (ECB) reduced its deposit rate into negative territory in June 2014. It has been reduced further in several steps to reach today’s level of −0.5%. Banks are increasingly facing problems investing their deposits without taking great risks and avoiding nominal depreciation. This article shows, however, that the deposit rate has never been the effective lower bound for deposits at the ECB and, moreover, the decision in September 2019 to introduce the tiering programme increased the average deposit rate rather than decreased it as one would have supposed. With this programme, the ECB has relaxed the situation, even though banks in the euro area make different gains. |
| url |
https://doi.org/10.1007/s10273-020-2658-7 |
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