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ECB's Coeure: If we decide to cut rates, we'd have to consider tiering

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ECB's Coeure: If we decide to cut rates, we'd have to consider tiering
FILE PHOTO: Benoit Coeure, board member of the European Central Bank (ECB), is photographed during an interview with Reuters at ECB headquarters in Frankfurt, Germany, May 17, 2017. REUTERS/Kai Pfaffenbach   -   Copyright  Kai Pfaffenbach(Reuters)
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BERLIN (Reuters) – ECB board member Benoit Coeure said in an interview published on Monday that if the ECB decided cutting rates was the best option, it would have to consider what effect negative rates would have on banks and whether tiering was needed.

A so-called tiered deposit rate would mean banks are exempted in part from paying the ECB’s 0.40 percent annual charge on their excess reserves, boosting their profits as they struggle with an unexpected growth slowdown

“We would have to consider whether a tiering system is needed,” Coeure said in an interview with the Financial Times. “Today the prevailing view in the Governing Council is that it is not, but we also agree that it deserves further reflection.”

(Reporting by Michelle Martin; Editing by Tassilo Hummel)

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