5 June 2014

European Central Bank (ECB) Introduces Negative Rates

ECB President Mario Draghi lowered the rate for overnight deposits by European banks to -0.10% to stimulate lending and to support the “real economy.” ECB also cut the refinancing rate to 0.15%, and the emergency borrowing rate to 0.40%. Germany is not happy with Draghi’s decision. In countries with a strong culture of saving, low rates, not to mention negative rates, are seen as penalizing savers.

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