May 6, 2019 / 3:56 PM / 6 months ago

Tiered ECB rate needs monetary policy case - Praet

FILE PHOTO: European Central Bank (ECB) executive board member Peter Praet speaks during an interview with Reuters in Frankfurt, Germany, March 14, 2018. Picture taken March 14, 2018. REUTERS/Ralph Orlowski

FRANKFURT (Reuters) - The European Central Bank must have a monetary policy case if it is to consider a multi-tier deposit rate, outgoing ECB chief economist Peter Praet said on Monday.

The ECB is currently studying whether to grant relief to banks from some of the charges on its minus 0.4 percent deposit rate, worried that weak bank profitability could impair the transmission of its policy.

But policymakers have long argued that low bank profits are not enough for the ECB to introduce such a new tool and instead, they need to be convinced that policy on the whole, for the entire currency bloc, would benefit.

Reporting by Balazs Koranyi; Editing by Peter Graff

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