Economics
ECB's Constancio Says Negative-Rate Policy Has `Clear Limits'
- Monetary policy not `zero-sum game' to depreciate currencies
- Says central bank actions are creating additional demand
This article is for subscribers only.
European Central Bank Vice President Vitor Constancio on Wednesday said there was only so much that negative interest rates can do to boost the economy and defended the central bank’s strategy as positive for the euro area as a whole.
It is “important to recall that there are clear limits to the use of negative deposit facility rates as a policy instrument,” he said in a speech at the Levy Economics Institute of Bard College in New York state. “Tier systems that simply pass direct costs at the margin can mitigate this concern but cannot dispel it altogether.”