The European Central Bank is technically able to cut its deposit rate below zero, but it remains a very complex question, governing council member Christian Noyer said Tuesday.
"We have what is necessary technically. Concerning the opportunity of doing it, it is a very, very complex question," Mr. Noyer said, noting no major central bank has tried it.
In Denmark, a negative deposit rate had the opposite of the desired effect, Mr. Noyer said, because banks compensated the losses they made from parking funds at the central bank by raising the cost of loans they made to business.
"It is very debatable and we are continuing to examine it," Mr. Noyer said at a presentation in Paris of his annual letter to the French President.
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