Draghi turns to weapons of last resort

Now Reading:

Draghi turns to weapons of last resort

Text size Aa Aa

It was a small step for lenders, a giant step for lending. The European Central Bank has – for the first time ever – imposed negative rates on overnight deposits, essentially charging banks for parking money in its vaults.

The idea is that this, coupled with a new wave of refinancing operations, will prompt them to get the money out into the real economy.

Reaching consensus on such moves may prove harder in the future, as central bank governors welcome a new recruit. Lithuania received the green light from the European Commission to adopt the euro in 2015.

Among EU States still not deemed ready for the euro there is Hungary, where the media industry is in uproar. A draft law to tax ad revenues has been proposed and critics say it is an attempt by ruling powers to strike down dissent.

The last story in this edition of Business Weekly started out as corporate, but it is turning into a diplomatic row. Paris has threatened retaliation if Washington goes ahead and imposes a huge fine on the largest French bank.

Click on the video to watch the programme.