In June 2014, the European Central Bank (ECB) cut the interest rate it pays on excess reserves

Question:

In June 2014, the European Central Bank (ECB) cut the interest rate it pays on excess reserves below zero. What was the rationale for this move and why would banks be willing to pay to keep deposits with the ECB?

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For book-img-for-question

Money Banking and Financial Markets

ISBN: 978-1259746741

5th edition

Authors: Stephen Cecchetti, Kermit Schoenholtz

See More Books

Question Posted: Jun 09, 2018 01:31 AM

See More Questions

a. Explain the dilemma that the European Central Bank (ECB) faces as it attempts to help countries with large budget deficits. b. Describe the types of conditions that the ECB required when providing...
Describe the conditions imposed by the European Central Bank (ECB) when it provides credit to European country governments with debt repayment problems.
Assume that you expect that the European central bank (ECB) plans to engage in central bank intervention in which it plans to use euros to purchase a substantial amount of U.S. dollars in the foreign...
Why is globalization of industries a common factor today?
Taste testers of new food products are presented with several competing food samples and asked to rate the taste of each on a 9-point scale (where 1 = "dislike extremely" and 9 = "like extremely")....
A rocket carrying a tank of water weighing 7.85 kN on Earth lands on the moon where the gravitational acceleration is one-sixth that of Earth's. Find the mass and the moon weight of the water.
A survey of German adults found that 73% of customers who shop online pay through PayPal. You randomly select 150 German adults who shop online. Find the probability that the number who pay through...
You are the CEO of a large organization that implemented a data warehouse for internal analysis of corporate data. The operations manager has written you a memo advocating opening the data warehouse...
The total sales of a company is $ 1 , 0 0 0 K . The company aims to increase its profit by 2 5 % . There are two ways to increase profit by 2 5 % , either by purchasing the raw materials at a lower...
Ben Swanson, owner and manager of Swansons Department Store, has decided to use statistical forecasting to get a better handle on the demand for his major products. However, Ben now needs to decide...
The Taylor rule in Problem 9 is thought to be a reasonably good description of policy behavior in the United States in the absence of unusual financial market conditions or deflationary worries....
Inflation, rather than the price level or nominal GDP, is the policy target of choice for many of the worlds central banks. Provide a reason why you think this is the case.
Your firm, Tickett & Wrunne is the external auditor of Cornflower Ltd (Cornflower). You are the audit manager and are conducting your final review before passing the file to the audit engagement...
Illustrate how Artificial Intelligence can be helpful for legal data analysis; Illustrate the technology and legal challenges of applying AI for legal data analysis.
Bond Calculation Exercise The Government of Canada is issuing a new 4 year Bond Today to yield 10% annually. We wish to purchase $10,000 of the issue. How do we prove it is worth that amount to us?...
Time is designated as follows: t = 0 represents today and t= 1 represents a year from today. Consider a mature firm, PQR Inc., which will be closed down forever after all t= 1 cash flow has been paid...
A 320,000 SF industrial property is under consideration for purchase. It currently rents for $4 PSF. Two nearby properties have recently sold and are comparable in size, design, and age. One property...
What is an appropriate percentage between 100% and 500% of the Medicare rate that you would use when setting your in-office fees and describe the reason why you would choose that percentage.
Graph the functions f(x) = x 1/3 and g(x) = x 1/4 . Find all points where the two graphs intersect. For x > 1, is f(x) > g(x) or is g(x) > f(x)?
r = 0.18 Find the coefficients of determination and non-determination and explain the meaning of each.
Examine an episode of large-scale interventions by the Bank of Japans (BOJ) in the yen-dollar foreign exchange market. Plot between January 2003 and January 2005 a measure of BoJ intervention (FRED...
Describe the problem of asymmetric information that an employer faces in hiring a new employee. What solutions can you think of? Does the problem persist after the person has been hired? If so, how...
In some cities, newspapers publish a weekly list of restaurants that have been cited for health code violations by local health inspectors. What information problem is this feature designed to solve,...
PLEASE REFER TO THE SCREENSHOT OF THE OUTPUT BELOW EACH QUESTION AND THE CODE TO ENSURE THAT THE GIVEN ANSWER MATCHES THE OUTPUT AND USES THE CORRECT TABLES SQL CODE(to long to post in text):...
Use Adventure Works Database Question 1 will be Sales.SalesOrderDetail table Questtion 2-3requires joining two tables: Sales.SalesOrderDetail and Production.Product 1. Using table...
The Driver Relationship team requested to ensure that there will be no duplicates in the active drivers tables in terms of first name, last name and driving license ID. You need to provide constraint...

In June 2014, the European Central Bank (ECB) cut the interest rate it pays on excess reserves

Question:

Step by Step Answer:

The ECB cut the rate in an effort to provide further monetary accommodation The deposit rate ...View the full answer

Money Banking and Financial Markets

Students also viewed these Business questions