Flash: Really, negative deposit rates? -BBH

FXstreet.com (London) - Strategists at BBH said, “While the ECB has acknowledged it is technically and legally ready to have a negative deposit rate, most officials seem clearly and understandably reluctant to take this unprecedented step”.

Key Quotes:

“Yes, a couple of countries like Denmark and Sweden have had negative deposit rates, but not major central bank has, including Japan, despite yesterday or ZIRP (zero interest rate policy)”.

“Not only are there intended and unintended consequences, but there are foreseeable and unforeseeable consequences”.

“It could potentially further squeeze the very same banks that the ECB would like to boost lending”.