• Lagarde: "I want the ECB more inclusive. Still risks to the economy"
  • The ECB's bazooka: cutting rates and buying securities in September


12 September 2019The European Central Bank's Governing Council has launched a new Quantitative Easing (QE) program, which provides for the purchase of bonds for 20 billion euros per month and will start in November. It is read in a note.

The bond purchases decided by the ECB today with the new quantitative easing program "will last all the time necessary to reinforce the accommodative impact of rates" and the board of directors expects that "they will finish shortly before when the ECB starts raising rates ", it is still read.

Deposit rate down to -0.50%
The central bank cut the rate on deposits to -0.50%, leaving the main rate unchanged at 0% and on marginal loans at 0.25%.

Two-tier system for lower impact of rates on banks
The Governing Council also established a two-tier system for the rates applied to bank deposits, now down to -0.5%, through which a portion of the deposits will be "exempted from the negative deposit rate". The measure serves to cushion the impact of negative rates on banks' interest margins.