ECB watching unwanted side effects of negative rates: Lane

ECB watching unwanted side effects of negative rates: Lane

NEW YORK (Reuters) – Banks in the euro zone have benefited from negative interest rates but the European Central Bank is aware that super low rates could eventually become counterproductive, ECB chief economist Philip Lane said on Friday.

“We are alert to the possibility that there may be a level for the policy rate below which a policy easing would have perverse effects and in fact lead to a tightening of bank credit conditions: the reversal rate,” Lane said in New York.

“The Governing Council is closely monitoring the risk that the impact of negative rates on bank profitability may impair the transmission of monetary policy to the real economy,” Lane added.

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Source : Reuters Link

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