Reuters exclusively reports ECB studying tiered deposit rate to alleviate banks’ plight; market reacts

Reuters exclusively reported that the European Central Bank (ECB) is studying options to lower the charge that banks pay on some of their excess cash as a possible way to offset the side-effects of its ultra-easy policy. The objective of the move would be to return some of more than 7 billion euros ($7.90 billion) a year the ECB collects in interest from banks. The story, citing sources close to the discussion, was later confirmed by the ECB and was widely quoted by traders and economists. Shares of banks with some of the highest levels of excess liquidity, such as Germany’s Commerzbank, rose as much as 7 percent during the trading day while 10-year German yields fell to their lowest level since late 2016.