Mar
31

Deflecting Deflation

In an attempt to prevent deflation, the European Central Bank (ECB) is actively considering charging banks, rather than paying banks interest on deposits. Doing this, it’s hoped, will encourage bank lending to private firms, which will lower their borrowing costs. It will also make the euro slightly less attractive, which will reduce its value and in the process drive up the cost of imports, increase inflation and boost exports.

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