ECB plays down effects of negative interest rates on banks

Frankfurt

THE European Central Bank (ECB) on Wednesday sought to counter claims by eurozone banks that negative interest rates were hurting their profitability.

ECB executive board member Benoit Coeure told a financial congress in Frankfurt that "we need to qualify the narrative that banks' challenges flow largely from our monetary policy". He conceded that the business environment confronting the European financial sector today was "evidently challenging"; banks' earnings were weak and with cost-cutting and rationalisation ongoing since 2008, further cost savings were harder to achieve.