Yves Mersch: The challenge of low interest rates for banks within the banking union

Speech

Yves Mersch: The challenge of low interest rates for banks within the banking union

By Bank for International Settlements (BIS)

He argues that negative rates, asset purchases and abundant liquidity were essential crisis responses and are still needed to return inflation to the ECB’s definition of price stability, but acknowledges that low rates compress net interest margins, pressure banks’ share prices and fuel competition from non-banks and fintechs.

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