Earlier this week, we looked at how the impact of negative rates varies by country after the ECB’s introduction of a new policy to relieve their effects.Today, Barclays has a piece of research out which points to the “structural drag” from negative rates, due to the zero bound of household deposits. In France and Germany in particular, it says, tiering only provides “partial relief”.From the note:Hence, euro area policymakers will eventually face a dilemma: do they accept lower credit growth in the euro area resulting from constrained balance sheet growth that, ultimately, reflects the negative side effects of monetary policy, or will regulators and governments provide policy relief to banks?Banks will need “radical help”, Barclays argues. It points to several outcomes. One is that
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Earlier this week, we looked at how the impact of negative rates