"It seems unlikely that the ECB is unaware of the effect of
negative rates on Danish lending volumes. So despite
extensive comments in the media about negative rates encouraging banks to lend,
I doubt if that is the real purpose. Indeed, as M3 lending
figures for the Eurozone actually improved slightly in April, it is hard to see why the ECB
would act now when it did not earlier this year.
So I don’t
think this is about bank lending at all. I think it is about German disinflation and the exchange value of the
Euro."
