There's trouble ahead.28 Mar 2019 17:22
A multi-tier deposit rate at the European Central Bank would favour certain lenders over others and policymakers should avoid such a market distortion.
With rates in negative territory since 2014, some banks in northern Europe are increasingly complaining about the cost of this charge on their excess liquidity, and ECB chief economist Peter Praet said the ECB would look at whether exempting them from some of this is warranted.
The root cause of the problem is that growth is slowing more than expected, forcing the ECB to reverse course and put plans for policy normalisation on hold, with inflation still far below its objective.
Meanwhile, this don't help......
German inflation remained below the European Central Bank's target level for a fourth month running in March, data showed on Thursday, showing price pressures in Europe's biggest economy are still moderate despite ultra-loose monetary policy.
Unfortunately, the German experience casts doubts on the ECB's view that the pass-through of higher wages on inflation has only been delayed and not derailed.