Jump to content
House Price Crash Forum
R K

Ecb Cuts Deposit Rate To -0.10% Refi Rate From 0.25% To 0.15%

Recommended Posts

Statement

http://www.ecb.europa.eu/press/pr/date/2014/html/pr140605.en.html

PRESS RELEASE 5 June 2014 - Monetary policy decisions

At today’s meeting the Governing Council of the ECB took the following monetary policy decisions:

  1. The interest rate on the main refinancing operations of the Eurosystem will be decreased by 10 basis points to 0.15%, starting from the operation to be settled on 11 June 2014.

  2. The interest rate on the marginal lending facility will be decreased by 35 basis points to 0.40%, with effect from 11 June 2014.

  3. The interest rate on the deposit facility will be decreased by 10 basis points to -0.10%, with effect from 11 June 2014. A separate press release to be published at 3.30 p.m. CET today will provide details on the implementation of the negative deposit facility rate.

The President of the ECB will comment on the considerations underlying these decisions at a press conference starting at 2.30 p.m. CET today. Further monetary policy measures to enhance the functioning of the monetary policy transmission mechanism will be communicated in a press release to be published at 3.30 p.m. CET today.

Further measures??

Edited by R K

Share this post


Link to post
Share on other sites

Great! now they've discovered there are more decimal places to play with, other than moving things by 0.25%

I predict that the economy of the future will be 'controlled' by rate changes of a trillionth of a percent.

Shit like this gets 'baked in' over time, does it not?

Edited by Reck B

Share this post


Link to post
Share on other sites

Cutting the rate by 0.1% will give the economy such a boost - not.

It seems to be a purely political event perhaps a signal to indicate that things are far far worse than they can openly admit.

Also a response to the pressure from the profligate UK money printers that the ECB should QE.

Edited by billybong

Share this post


Link to post
Share on other sites

hmmmm

Voters across the continent have expressed their discontent with the EU

The ECB is trying to give the impression it is in control when it very clearly isn't

Not looking so good for our continental neighbours just now

Share this post


Link to post
Share on other sites

A negative deposit rate.

WTF are they going to do when the figures reveal there's a recession!!!

Admit that they don't know what they're doing?

Share this post


Link to post
Share on other sites

This is massive. Banks have to hold reserves and if there is a negative central bank interest rate, they will want to minimise this and this may result in them turning away deposits or offering negative interest rates.

A likely result is the swapping of euros to other currencies and a weakening of the euros as well as a drop in the yield on other assets.

Share this post


Link to post
Share on other sites

Currency wars are alive & kicking.

Carney's going to have to try alot harder if he wants to stay in this game.

Share this post


Link to post
Share on other sites

Are this lot just jealous of our booming economy and trying to sink us?

Earlier in the week they had the nerve to tell Osborne to alter Help to Buy (Fire torpedo 1) and 'deploy appropriate measures' against rising house prices (Fire torpedo 2).

Share this post


Link to post
Share on other sites

there is a further statement to come at 1330 UK apparently...

QE?

See OP - presser at 1.30. Statement on further measures/money tranmission at 2.30. My guess he'll have to explain at presser.

Share this post


Link to post
Share on other sites

It makes you nostalgic for Black Wednesday with a series of increasingly panicked statements throughout the day.

What happened to Lamont? Oh yeah, he sits in the Lords and advises Osborne.

Share this post


Link to post
Share on other sites

See OP - presser at 1.30. Statement on further measures/money tranmission at 2.30. My guess he'll have to explain at presser.

I am quite looking forward to it in a macabre sort of way

Share this post


Link to post
Share on other sites

The way I see things.

European banks know a major collapse is a coming - so will see having their funds on deposit at -0.1% with the ECB is a better option than lending it into a bust, debt-saturated economy.

They might even pass this cost onto normal account holders through bank charges. (rather than mirroring negative interest rates, which would certainly cause people to withdraw en-masse)

Edited by Reck B

Share this post


Link to post
Share on other sites

The Euro is hardly tanking on the news and gold isn't moving yet either.

Draghi has a history of promising bold actions and the market being disappointed at what he actually delivers, so I wonder if the staggered announcements are a way for him to assess the reaction to each before actually committing to anything more.

In other words, I think his back is against the wall and he's making it up as he goes along. Seems that Super Mario is not so good at guessing how the crowd will guess the rest of the crowd will react...

http://www.salientpartners.com/epsilontheory/notes/A_Game_of_Sentiment.html

Share this post


Link to post
Share on other sites

the ECB has been carrying out economic analysis.

One would wonder just what they have been analysing.

Share this post


Link to post
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now

  • Recently Browsing   0 members

    No registered users viewing this page.

  • The Prime Minister stated that there were three Brexit options available to the UK:   224 members have voted

    1. 1. Which of the Prime Minister's options would you choose?


      • Leave with the negotiated deal
      • Remain
      • Leave with no deal

    Please sign in or register to vote in this poll. View topic


×

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.