Dragi: the ECB may have to soften the impact of negative interest rate banks complain that the interest rate hurting profitability and reduce the supply of credit. Dragi “low profitability of banks is not the inevitable result of interest rates” if necessary, we must think of possible measures that can preserve the positive implications of negative interest rates on the economy, while reducing the side effects, if any, “said the President of the European Central Bank Conference in Frankfurt. “However, low profitability of banks is not an inevitable consequence of negative interest rates.” Dragi not elaborated what measures the European Central Bank may adopt to soften the effects of the negative interest rate policy. The bank kept its interest rate for deposits below since June 2014. Recently, the increasing claims from commercial banks because of negative interest rates hurting their profit margins, which threatens to undermine the supply of credit. While policymakers insisted that the negative interest remains part of their Toolbox, some in recent months warned against keeping interest rates below zero for too long, saying that attacks on the Bank’s profitability could prevent hatmricim reaching for the economy. The European Central Bank is one of the few central banks adopted a negative interest rate without mitigating action. Japan’s Central Bank, the Swiss National Bank and the Central Bank of Denmark use different versions of a layered system that does not contain the negative effects of negative interest rates on most reserves of commercial banks. Banking shares rose, with the banks index (Euro Stoxx Banks) increased by 0.5% on 12:13 watch. The euro traded at 1.1272 relative stability in Exchange for dollars. In his speech he said still required dragi taking a stand on monetary policy, which will ensure that growth in the area get in eventually. Dragi spoke today at a meeting of the ECB and its observers Conference in Frankfurt, in the first of several speeches by Bank officials.


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