Comments from Knot:

  • Deposit rate tiering would favour one type of lender over others
  • Bank sector profitability secondary issue compared to monetary policy objective
  • Reasons why inflation not rising mostly beyond ECB control
  • Monetary policy really can't help any more than it has
  • Crisis has shown we know even less about inflation than we thought

This is some serious push-back from Knot on tiered deposit rates. The idea was that the ECB would help out banks by avoiding negative rates for certain types of lending. They do something similar in Switzerland but Knot is having none of it.

The euro didn't react to the headlines but is down 17 pips to 1.1227 on the day.