World Business NewsA round up of the latest news for those doing business internationally
ECB cuts rates and launches €400bn lending boost
Zone(s): Europe ¦ Sector(s): Finance, Banking
[5 June 2014, New Model Adviser] By Daniel Grote: The European Central Bank (ECB) has announced a cut to interest rates and a new €400 billion (£323 billion) programme to boost bank lending as it acts to ward off deflationary pressures.
The ECB has cut its main rate, which is used as a benchmark for consumer borrowing, from 0.25% to 0.15%. And it has entered unchartered territory by introducing a negative deposit rate, of -0.1%, meaning banks will be charged to park their cash with it. The rate for the ECB’s marginal lending facility has also been cut, from 0.75% to 0.40%. ECB president Mario Draghi said rates were likely to remain at those levels ‘for an extended period of time in view of the current outlook for inflation’.