ECB plans reserve rule for banks

Article Abstract:

European Central Bank (ECB) has decided to set a requirement on the minimum reserve of commercial banks to obtain an additional tool to gauge market liquidity. The proposed guideline calls for commercial banks to keep a certain percentage of their deposit base at the ECB. The reserves also serve as a liquidity cushion that tends to reduce fluctuation in money market rates and has been likened to a tax on commercial banks. ECB director general Yves Mersch said the minimum reserve requirement will certainly be low.

Comment:

Europe: European Central Bank is to set minimum reserve requirement on commercial banks for added tool to gauge market liquidity

Commercial Banks, Commercial Banking, Europe, Government regulation (cont), Article

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ECB signals possible interest rate rise

Article Abstract:

The European Central Bank is signaling that it might raise interest rates as an anti-inflation measure. In its monthly report for Oct 1999, the bank said that, in light of the prospect of accelerating Euro-area economic growth, it must carefully track the risk of upward price pressure.

Government domestic functions, Administration of General Economic Programs, European Union, Domestic Monetary Policy, Statistical Data Included, Prices and rates, Prevention, Economic policy, Inflation (Finance), Interest rates, Monetary policy, European Union. European Central Bank, Inflation (Economics)

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