Inter-Bank Market

[JEast]

As it appears that the inter-bank market will remain broken in the US for a little longer and will not return to normalcy anytime soon, noticed that it looks like the ECB is floating a story that they may soon go to negative rates for excess cash as their inter-bank market remains broken too.

 

http://www.bloomberg.com/news/2013-11-20/ecb-said-to-consider-mini-deposit-rate-cut-if-more-easing-needed.html

 

Cheers

JEast

[wisdom]

Summers and Krugman are proposing something similar. I was reading someplace a possibility of sharp drop in rates (say negative 4%) to shock the savers into buying assets.

 

It would be like a tax.