DThe ECB does with the controversial Increase in penalty interest serious for banks. The monetary authorities put on Thursday the interest rate to minus 0.5 from previously minus 0.4 percent. Financial institutions have to pay this rate when they park money at the central bank. Consumer advocates fear that banks will take this as an opportunity Savers to ask for cash,
With more bond purchases wants the ECB against the economic downturn to stem. The Council gave the green light to invest 20 billion euros in securities monthly from 1 November.
Thus, the central bank again tightened its ultra-loose monetary policy at the end of the term of office of ECB President Mario Draghi. The eight-year term of the Italian ends on 31 October 2019. The interest rate. which has been at a record low of zero percent since March 2016 remains unchanged at this level,
It was expected that the central bank would refill again. Given the global slowdown and world trade weakness, "significant monetary stimulus" is needed, Draghi said after the ECB Governing Council seven weeks ago.
A minus sign in the deposit rate means that the institutions penalty interest if they park excess money with the central bank. The sentence is already negative since 2014,
The central bank wants to get banks to pass on the many cheap money that the ECB has made available to businesses and consumers so that it flows into investment and consumption. That should be the Push the economy and the Increase inflation,
In the medium term, the ECB is aiming for a rate of inflation of just under 2.0 percent for the euro area. That's far enough away from the zero mark. Because permanently low prices are considered risk for the economy: companies and consumers could postpone investment in the hope that it will soon become cheaper.
However, the ECB's two-percent target has become a distant one: in August, inflation in the 19 countries with the single currency remained at 1.0 percent, the lowest level in more than two and a half years.
The ECB also sees a strengthening of the sluggish economy States without budget problems like Germany's responsibility. ECB chief Mario Draghi said: "It is high time that fiscal policy takes responsibility." In the accompanying text to interest rate decision states that given the gloomy economic outlook countries with room for maneuver in the budget are required to act "effectively and in a timely manner". The ECB expects the euro zone to continue its weak economic phase.
That the ECB not only pushed the first rate hike further into the future, but also tightened the penalty rate, charged banks double. Already, financial institutions in the euro area, according to calculations by the Federal Association of German banks (BdB) in the year round 7.5 billion euros in negative interest pay to the ECB. Individual institutions in Germany have been passing on the penalty interest to companies or large investors such as funds for some time. And even wealthy private customers are asked in some house to checkout.
The majority of private customers have so far been spared from punitive interest. This could change now. "If it costs money in the long term to accept deposits, and if you have to pay interest to borrowers at the same time, somebody will have to pay," he said President of the German Savings Banks and Giro Association (DSGV), Helmut Schleweis.
Federal Finance Minister Olaf Scholz on the other hand, penalties do not apply to most savers. "I do not believe that private customers in Germany nationwide expect negative rates," said the SPD politician in an interview with the "Passauer Neue Presse". "We are monitoring the situation, however, and are exploring our options for action." Most contracts for savings customers currently do not allow any penalty payments.
US President Donald Trump accused the ECB of harming US action. The ECB had successfully devalued the euro against the "very strong dollar", he tweeted only a few minutes after the interest rate decision of the European Central Bank on Thursday. This is a pity US exporters, At the same time, he accused the US Federal Reserve of always waiting.
Also US Treasury Secretary Steven Mnuchin criticized the European monetary authorities for Draghi. He told CNBC that the US was focused on a strong dollar. The negative interest rates in the euro zone are a cause for concern. This would make a "good economy" more difficult.
Trump, who is seeking his re-election at the end of 2020, has been pressing the independent Fed for a long time to cut interest rates sharply. On earlier occasions, he had already criticized the ECB for its loose monetary policy.
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