• effectiveness in bringing about lower credit rates is debatable

BUBA president and ECB governing council member on the wires

  • but to counter the consequences of strong euro appreciation for inflation outlook then negative rates would appear to be a better tool than others

EURUSD a little lower on the hint of combatting euro strength

Add:

  • we are talking about hypthetical scenarios here not about imminent decisions
  • not worried about money markets right now
  • we still have leewway to deploy conventional monetary policy measures but their scope is limited
  • QE programme is not out of the question, must avoid monetary financing
  • strict and credible balance sheet assessment of banks more relevant than any debate about further monetary policy measures

Euro lower again on the QE mention

EURUSD 1.3807 EURGBP 0.8372 EURJPY 141.12