Frankfurt / Main (dpa) - zero interest, penalty interest, bond purchases - the European Central Bank (ECB) has pulled out all the stops in recent years. But now Europe's monetary guard sees itself forced to act again.
In view of the global economic slowdown and the weakness of world trade, "significant monetary stimulus" is necessary, Federal Reserve Chairman Mario Draghi said at the recent meeting of the ECB's Governing Council seven weeks ago. Its ultimate goal, price stability with an inflation rate of just under 2.0 percent, misses the central bank for some time clearly.
Tomorrow, Thursday (12.9.), The central bank's decision-making body could follow the words with deeds. Economists expect a whole bundle of measures:
- ENHANCEMENT OF CRIMINALS: ECB observers are almost certain that the central bank will tighten the penalties banks have to pay when they park money with the central bank. Currently, this negative deposit rate is minus 0.4 percent - a billion-euro burden for the financial sector in the eurozone. In the room there is a further reduction to minus 0.5 percent or even minus 0.6 percent. The aim of the monetary authorities is to get the institutions to lend money to businesses and consumers in the form of loans to boost the economy.
- STAFFELZINS: At the very least, we are discussing a staggering of the punitive interest rate in order to reduce the negative interest burden on the banking industry. The ECB could exempt part of the excess reserves of banks from the negative interest rate via allowances. However, due to the unequal distribution of surplus reserves in the euro area, such a measure is considered to be relatively complicated.
- BOND PURCHASES: Since January, no fresh ECB money has gone into buying government bonds - but that could change. "All instruments are on the table," Draghi had emphasized - including a new edition of the securities purchases. Such purchases help states to get cheaper fresh money. Because if the ECB buys large stocks, they do not have to offer so high interest rates for their bonds. At the same time, the ECB is pumping a lot of money into the market via asset purchases. That should help inflation on the jumps. From March 2015 to the end of 2018, the ECB invested around € 2.6 trillion in bonds.
However, the central bank has set itself limits for the controversial purchases. For example, it does not want to buy more than a third of all government bonds in a country. According to calculations by Landesbank BayernLB, this limit has almost been reached in some eurozone countries. Especially in the Netherlands, the purchasable government securities would be scarce. The central bank could therefore be forced to raise the purchase limit. However, this would again expose it to the charge of exceeding its legal mandate and of public financing with the help of the printing press. Economists are therefore speculating on a stripped-down purchasing program, for example, of a monthly 30 billion euros over a period of one year.
- CEMENTING OF ZINSTIEFS: Recently, Europe's monetary watchdogs put on record, they assumed that the key interest rates in the euro area "at least for the first half of the year 2020 ... remain at their current or lower levels." This so-called forward guidance could be extended in time. The central bank may therefore postpone the prospect of a first interest rate hike even further into the future.
Time series ECB interest rates
ECB purchase program