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ECB Discusses 2-Tier Bank Charges

ECB Discusses 2-Tier  Bank ChargesECB Discusses 2-Tier  Bank Charges

Eurozone central bank officials are considering options such as whether to stagger charges on banks hoarding cash or to buy more debt ahead of the next European Central Bank meeting, according to officials, Reuters reported. Little over a week before the meeting to set the ECB’s policy course, numerous alternatives are open, from snapping up the bonds of towns and regions to introducing a two-tier penalty charge on banks that park money with the ECB. Officials, who spoke on condition of anonymity, said that even buying rebundled loans at risk of non-payment has been discussed in preparatory meetings, although such a radical step is highly unlikely for now. The ECB declined to comment. “They are still trying to figure out what will be in the package. A lot of people have different views,” said one official with knowledge of talks that have put ECB President Mario Draghi at loggerheads with skeptical German policy-makers. “There are some who say you should surprise markets. But you cannot surprise indefinitely. Sooner or later, you are bound to disappoint.”

 

Financialtribune.com