The European Central Bank is considering measures to ease substantial losses on
its balance sheet, with discussions expected to reach a critical stage this
autumn, ECB President Lagarde said. Policymakers will debate raising minimum
reserve requirements — effectively increasing the share of banks’ deposits held
in non-remunerated central bank accounts — and are also evaluating a tiered-rate
system that would stop paying interest on some excess reserves and options to
levy fees on banks. The options are intended to reduce burdens on national
central banks and partly offset losses stemming from QE between 2015-22 and
large interest payments after rapid rate hikes in 2022-23. Sources said the
politically sensitive discussions remain divisive.
