Monday, June 23, 2025

European Central Bank Issues 1.3 Trillion Euros in Negative Interest Rate Loans

In response to the unprecedented economic impacts stemming from the coronavirus pandemic, the European Central Bank (ECB) has issued a record 1.3 trillion euros affixed with negative interest rates as a form of monetary policy.

According to the ECB, so far a total of 742 banks have applied to borrow a portion of the 1.3 trillion euros at a interest rate of -1% if certain conditions are met. In order to secure a loan at the -1%, banks are required to only lend to businesses and households, and not to residential mortgages while maintaining 2019 levels. If the criteria cannot be met, then the bank’s interest rate is increased to -0.5%.

It is being anticipated that approximately 760 billion euros from the ultra-cheap loans will go towards repaying previous ECB loans which have an approaching maturity date. However, the remaining 549 billion euros is expected to go towards purchasing bonds issued by the bank’s domestic governments, which will in turn earn the bank profit given the higher yield affixed to government bonds.

Thus, the ECB’s negative rates will ultimately support up to 1.5 trillion euros worth of additional debt accumulated by eurozone governments in response to the coronavirus pandemic. According to some analysts however, such a scenario will result in banks having their fate tied to their governments; Italian banks for example own approximately 425 billion euros of their country’s debt.

Information for this briefing was found via Financial Times. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

Video Articles

Tudor Gold x American Creek: Consolidating A Massive Gold Project

Aura Minerals: The Era Dorada Underground PEA

Gold Is Now Smart Money’s End Game | Doug Casey

Recommended

Goliath Resources Closes Out Funding Round With Total Gross Proceeds Of $27.1 Million

Silver47 Kickstarts 4,000 Metre Drill Campaign At Red Mountain Project

Related News

Steve Bannon is a Socialist: Merge the Fed and Treasury, Start Buying Corporate Debt

Prior to the Stimulus Package passing, an interview that fell under the radar last week...

Saturday, March 28, 2020, 10:27:21 AM

Central Banks Ramp up Fight Against Cryptocurrencies in Effort to Control Global Monetary System

Central banks around the world have begun to take action against cryptocurrencies, after a recent...

Thursday, June 24, 2021, 02:43:00 PM

Eurozone Inflation Soars to 2% for First Time Since 2018

In yet another sign that mounting inflation is becoming pronounced around the globe, for the...

Wednesday, June 2, 2021, 03:34:00 PM

Central Banks Buy Record Amount Of Gold In Q3

Central Banks bought more gold than ever last quarter, according to the World Gold Council’s...

Wednesday, November 2, 2022, 04:32:00 PM

Gold Rallies upto 7% as Central Banks Around the Globe Continue to Print their Way Out of the Coronapocalypse

This morning Gold has rallied approaching 7 year highs. We can see Gold is pushing...

Tuesday, March 24, 2020, 09:41:47 AM