Banks Paid to Borrow From Each Other
Via massive QE purchases of bonds, ECB president Mario Draghi is flooding Europe with cash that European banks don’t want and cannot use.
One curious result of unwarranted QE is a negative interbank lending rate: Banks Paid to Borrow as Three-Month Euribor Drops Below Zero.
Banks in the euro area can now get paid to look after each others’ cash for three months as the European Central Bank’s bond-buying program floods the region’s money markets with excess liquidity. Continue reading