Banks Find It Hard To Decode Draghi Still Puzzling Over ECB Grand Plan

Banks are finding it hard to decode what Mario Draghi, President of ECB wants to do. Most of the banks are still puzzling over ECB Grand Plan. Four weeks after ECB unveiled its grand plan and lowered the deposit rate for the first time into the negative territory, economists are still puzzling over it. Draghi is still trying to ensure the investors that ECB will keep the monetary policy loose far longer than the US FED or for that matter the BOE.

Mario Draghi’s latest stimulus tool contains a hidden message: If you think interest rates will rise before 2018, take the money now. The European Central Bank president has offered lenders a fresh round of cash for as long as four years to keep them afloat and make them support an economic recovery by encouraging lending. He’s also inviting bets on when the ECB will scale back its ultra-loose monetary policy — the more a bank expects borrowing costs will rise over the term, the more attractive the loan looks.

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