ECB gives banks relief from penalty rate with tiered system

FRANKFURT (Reuters) – Euro zone banks will be exempted from paying the European Central Bank a penalty charge on idle cash worth six times their mandatory reserves, the ECB said on Thursday.

“This decision aims to support the bank-based transmission of monetary policy, while preserving the positive contribution of negative rates to the accommodative stance of monetary policy,” the ECB said.

“The remuneration rate of the exempt tier and the multiplier can be changed over time,” it added.