ECB discussed negative deposit rates - Draghi

Published December 06, 2012

| Reuters

The European Central Bank discussed negative deposit rates at its meeting on Thursday, ECB President Mario Draghi said, but took no action.

"There is no news there ... we are operationally ready, but the discussion didn't go into any depth with respect to this point," Draghi said at a news conference.

"We briefly touched upon the complexities that such a measure would involve and possible unintended consequences, but we didn't elaborate any further."

Creating negative deposit rates -- effectively charging depositors rather than paying them interest -- is a way of forcing banks to put their money to work elsewhere.

The July EONIA forward rate -- a key indicator for money market rates -- turned negative during Draghi's news conference.

(Written by Jeremy Gaunt)

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