Mises Wire
Author:
Thorsten Polleit
Online Publish Date:
The European Central Bank (ECB) pushed its deposit rate to minus 0.4 percent in April 2016: Since then, euro area banks must pay 0.4 percent per annum on their excess reserves held at ECB accounts. This, in turn, has far-reaching consequences. To start with, banks seek to evade this “penalty rate,” especially by buying government bonds. That