ECB Cut rate to 0%

OU812

SOURCE: RTE

The ECB has cut its deposit rate deeper into negative territory

The European Central Bank has cut its main interest rate from 0.05% to 0% - the first cut since September 2014 - in an effort to boost sagging euro zone economy.

The bank has also cut its deposit rate deeper into negative territory, cutting it to -0.4% from -0.3%.

The ECB also said that it would increase its bond buying programme from €60 billion a month to €80 billion a month.

The bank also said it would launch a new series of four targeted longer-term refinancing operations (TLTRO), each with a maturity of four years

ECB President Mario Draghi will hold a press conference later this afternoon.



Great news for tracker holders.

Xcellor

OU812 wrote: »

SOURCE: RTE

The ECB has cut its deposit rate deeper into negative territory

The European Central Bank has cut its main interest rate from 0.05% to 0% - the first cut since September 2014 - in an effort to boost sagging euro zone economy.

The bank has also cut its deposit rate deeper into negative territory, cutting it to -0.4% from -0.3%.

The ECB also said that it would increase its bond buying programme from €60 billion a month to €80 billion a month.

The bank also said it would launch a new series of four targeted longer-term refinancing operations (TLTRO), each with a maturity of four years

ECB President Mario Draghi will hold a press conference later this afternoon.



Great news for tracker holders.

If it goes below 0% what impact will that have? Is that even possible with this rate?

howamidifferent

Hopefully AIB will have to start paying me for having a mortgage with them. :pac:

OU812

They were at -0.3 & have just gone to -0.4 for deposits so anything is possible.

For those with trackers, they're now just paying interest to the bank at the rate above ECB, if they were to go to negative figures (say for example -0.25 & you were on an interest rate of 2% above ECB, you'd then be paying 1.75%...

Xcellor

OU812 wrote: »

They were at -0.3 & have just gone to -0.4 for deposits so anything is possible.

For those with trackers, they're now just paying interest to the bank at the rate above ECB, if they were to go to negative figures (say for example -0.25 & you were on an interest rate of 2% above ECB, you'd then be paying 1.75%...

That would be nice. Not sure it's gonna happen but good to dream!!

Yggr of Asgard

It also means that the meager earnings you get on savings accounts might now go away and you might need to pay your bank for storing your money. Some banks on the continent have started with negative rates on savings accounts. So you loose money because of "interest" and inflation.

Great seasons for home invasions coming up when we all revert back to store money under out bed to not loose money on interest.

NIMAN

So all the changes, many of them dramatic, that they have made are not working, that's basically what this news means today.

Is it time to start worrying? Are they running out of ideas to kick-start growth?

newacc2015

Yggr of Asgard wrote: »

It also means that the meager earnings you get on savings accounts might now go away and you might need to pay your bank for storing your money. Some banks on the continent have started with negative rates on savings accounts. So you loose money because of "interest" and inflation.

Great seasons for home invasions coming up when we all revert back to store money under out bed to not loose money on interest.

Where is this mysterious inflation? The Eurozone inflation rate is at zero and often below zero. There is no inflation to loose the value of money on

What retail banks are giving negative saving rates? I have yet to hear of any retail banks doing it with regular deposits.

http://www.bloombergview.com/quicktake/negative-interest-rates

Negative interest rates are to stop banks depositing money in the central bank and to start lending it. The ECB is flooding Europe with credit and bank are just depositing it back into the ECB, instead of lending.

IMO the ECB should whatever they can to stop us becoming like Japan. Deflation is near impossible to stop.

cnocbui

newacc2015 wrote: »

Where is this mysterious inflation? The Eurozone inflation rate is at zero and often below zero. There is no inflation to loose the value of money on

What retail banks are giving negative saving rates? I have yet to hear of any retail banks doing it with regular deposits.

http://www.bloombergview.com/quicktake/negative-interest-rates

Negative interest rates are to stop banks depositing money in the central bank and to start lending it. The ECB is flooding Europe with credit and bank are just depositing it back into the ECB, instead of lending.

IMO the ECB should whatever they can to stop us becoming like Japan. Deflation is near impossible to stop.

I think the economic theory behind QE is thoroughly dis-proven, by this point. It's not so much that banks aren't lending as people aren't borrowing.

Lumina

Great news for the old tracker

jd

Lumina wrote:

Great news for the old tracker

50 euro per 100k a year!

JTMan

Yggr of Asgard wrote: »

Some banks on the continent have started with negative rates on savings accounts.

Some business, corporate and private wealth savings accounts have negative rates. However, there are only a very small number of examples of retail banks charging negative rates. In the vast majority of cases, banks, even in Sweden and Switzerland who have even more negative rates, do not pass on negative rates to retail customers. The floor for retail deposit rates is zero or normally 0.01%.

Negative rates are not coming to retail accounts because banks simply cannot get away with charging customers to deposit money with them. The FT, Economist and others have come to this conclusion in recent articles on negative rates.

ronan45

jd wrote: »

50 euro per 100k a year!

50 Euro per 100K a year, sure that averages out too on the average Irish Mortgage.. about what €12 euro a month, i was getting all excited there:pac:

http://www.irishtimes.com/business/personal-finance/borrower-or-saver-what-ecb-rate-cut-means-for-your-pocket-1.2567773

1. Borrowers: In a surprise move, the ECB cut its main refinancing rate, already at a historic low of 0.05 per cent, to zero per cent. This will mean tracker mortgage rates will fall by the same amount. The cash savings will be small - around €3 to €4 a month for many of the 400,000 or so tracker mortgage holders in the country.
The important message for tracker mortgage holders is not that they will be able to afford an additional pint every few weeks, but rather that they will not face a rise in repayments for some years.

Lumina

Remember lads, count the pennies and the pounds will look after themselves...

Chris_5339762

Also remember lads, that not one of the banks will cut any of its rates because of this! (apart from trackers, because they have to)

soirish

Draghi just made a huge mistake signaling that the #ECB's super-quant move today is the end of "whatever it takes." € rally is big problem.

di11on

I'm looking at taking out a mortgage. How long does it take for ECB rate changes to filter down to mortgage products?