Europe’s Money Markets Are on Alert for Stricter ECB Bank Reserve Rules
- ECB has paid zero interest on minimum reserves since Sept. 20
- Commerzbank, Barclays say MRR could be doubled to 2% this week
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Speculation is building over whether European lenders will be forced to park more cash with the central bank, a move that may hit their profitability and increase volatility in short-term euro rates.
Strategists at firms including Commerzbank AG, Barclays Plc and UBS Group AG have warned the European Central Bank could surprise markets and increase the so-called Minimum Reserve Requirements, or MRR, as soon as this week as it seeks to reduce costs and drain excess liquidity.