After a brief meeting on news, Mario Draghi signaled that more details on the new series of long-term bank loans (TLTRO-III) will only be announced at the next meetings.
"Details on the precise terms of the new series of targeted long-term refinancing operations (TLTROs) will be announced at one of our upcoming meetings. In particular, the prices of the new TLTRO-III operations will take into account the transmission channels of monetary policy via banking, as well as new developments in the economic outlook, "the European Central Bank (ECB) president said at a press conference , this Wednesday.
Draghi also confirmed that the tiering, a measure that could help banks in an extended period of ultra-low rates, is being considered by the Board of Governors. In this scenario, a 'climbing' deposit rate would allow some banks to be partially exempted from paying the ECB a rate of 0.40% per annum on excessive reserves, boosting windfall profits at a time of unexpected economic braking.
"In the context of our regular assessment, we will also consider whether preserving the favorable implications of negative interest rates for the economy requires mitigating possible side effects, if any, on banking intermediation," he said.
At this week's meeting, the Board of Governors chose to keep interest rates at record lows, as expected. "The Governing Council of the ECB expects the ECB's key interest rates to remain at current levels at least until the end of 2019 and in any case as long as it is necessary to ensure the continued convergence of inflation towards levels below, but close, 2% in the medium term, "said the institution in a statement released after the meeting.