ECB's Praet: Need a solid monetary policy case for tiered rates

The European Central Bank (ECB) needs a solid monetary policy case before introducing tiered deposit rates to mitigate the side effects of negative rates on banks, the central bank's Chief Economist Peter Praet said on Thursday. 

Reuters reported yesterday that the ECB is studying options to lower the charge that banks pay on some of their excess cash as a possible way to help banks cope up with its ultra-easy policy. 

Key quotes

There needs to be a solid monetary policy case before officials act to mitigate the side effects of negative rates on banks.

ECB staff is examining the need for tiered rates but the action isn't a done deal.

Doesn't see a particular problem with the economy and current lending channels, but with the weakening economy, it may happen in the future.