ECB Keeps Rates Unchanged, Deposit Facility Rate Stays Negative

Tyler Durden's picture

Unlike a month ago, this time there are no NIRP announcement fireworks from the ECB which just announced it kept all rates unchanged, with the main refinancing operation rate flat at 0.15%, while the deposit facility continues its existence in NIRP purgatory at negative 0.1%.

From the press release:

At today’s meeting the Governing Council of the ECB decided that the interest rate on the main refinancing operations and the interest rates on the marginal lending facility and the deposit facility will remain unchanged at 0.15%, 0.40% and -0.10% respectively.


The President of the ECB will comment on the considerations underlying these decisions at a press conference starting at 2.30 p.m. CET today.

As explained earlier, the focus today will be on Draghi's conference where much more clarity on the TLTRO program (not to mention the ABS purchase) is expected. However, with an epic data avalanche out of the US at the same time, we wouldn't be surprised if a few algos blow a gasket in the confusion what is the more important headline.

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Debugas's picture

are banks forced to keep deposits with ECB as required reserves ? At negative interest rate of 0.1% ?

Why can't they keep reserves as cash ?

Ghordius's picture

reserves are one thing, and reserves in excess of requirements a different one. the latter is way bigger than the first. technically, it's all cash (in electronic/book form). mostly, it's a question of bank balance sheet cosmetics. though regulations like Basel III have an impact on this

Cognitive Dissonance's picture

Smoke and mirrors mostly since many of the 'banks' in the ECB are bankrupt. Not technically though cus they constantly fudge the numbers and change the rules. Still.............

Ghordius's picture

bankrupt? no. they have a very high leverage. which has a lot to do with the fact that small and medium business is way bigger, herem and is financed through direct business loans, instead of stocks and bonds. which makes their balance sheets look worse, when compared to Anglo American or other megabanks

otherwise, most of them are in the same conditions like all the others, worldwide. I'd call it suffering a small 'bout of semi-zombification. aka healing, if not "shocked again" too early

see the Japanese banks who were in similar conditions in the '90s

Cognitive Dissonance's picture

"Damn the fiat torpedoes, full speed ahead." - Draghi

Bernoulli's picture

Did everybody stack enough Call options for today?


nink's picture

How do I get me some of that -0.1% 

disabledvet's picture

Sweden lowered rates. The euro zone is entering into an entirely new stage of catastrophe at this point. Switzerland, Britain...just trying to stay out of the way.

If I were to hazard a guess the bulk of these males have headed to Aleppo and Ukraine. "These folks are loaded for bear."

Ghordius's picture

Switzerland, together with half a dozen other european countries, has pegged (or floored) to the EUR

if you call this "staying out of the way", then it's staying out of the way of the USD

Bernoulli's picture

Switzerland not really staying out of the way.

They are knee-deep in this stinky broth of crap.

eddiebe's picture

Lies and more damned lies.

eddiebe's picture

Looks to me like a currency crisis waiting to happen.

Debugas's picture

i can not understand why would anyone keep money with ECB at negative interest rates unless forced to keep it there

so my question is why banks keep deposits there at negative interest rate ?