European Central Bank members voice concern over its negative rate policy

Two members of the European Central Bank (ECB) have expressed concern at its current negative rate policy, fearing “unintended consequences” it could have on the region’s financial system. Italian central bank chief and ECB member Ignazio Visco, considered a dove that backed President Mario Draghi’s recent policy announcements, told CNBC that negative interest rates were the standout “unconventional” policy that had been implemented by the euro zone’s central bank. “I’m concerned. I’m concerned of unintended consequences,” he told CNBC’s Geoff Cutmore Thursday at the IMF and World Bank annual meetings in Washington, D.C. “We have done a lot of analysis. At the end, we concluded that the package that we put together would be beneficial and even the elements of the package taken one-by-one would have a positive effect up to a point. And I think we are very close to that point. I don’t want to pass that point and then end up in a trap of negative interest rates.” “So we have to be very careful about the side effects,” he added. The ECB’s recent policy decision saw the launch of a substantial package of quantitative easing (QE), also known as large-scale asset purchases, and further reduce its… Read full this story

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