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Money and Monetary Policy
In historic step, ECB pushes bank deposit interest rate below zero
In historic step, ECB pushes bank deposit interest rate below zero

In a bid to spur growth and avert the dangerous threat of deflation bedeviling the sluggish Eurozone economy, the European Central Bank cut its benchmark interest rate to a record low and took the unprecedented step of lowering the bank deposit rate below zero. The announcement Thursday in Frankfurt, Germany, marks the first time that a major central bank has pushed down a key rate into negative territory. Not even the Bank of Japan, during its two decade-long battle with deflation, or the Federal Reserve in the wake of the Great Recession, has tried such an unusual approach. The negative-rate move was the most eye-catching of a series of steps unveiled by Mario Draghi, president of...

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