ECB Leaves Rates Unchanged in Pause for Brexit Effects

The video discusses the European Central Bank's (ECB) challenges in addressing inflation and limited policy tools. It explores the ECB's potential actions, such as tweaking programs and communicating commitments, and their impact on bond yields. The ECB's communication strategy and decisions on interest rates are examined, along with the debate on negative deposit rates and their effects on the banking system. The video also highlights Elettro, a mechanism to incentivize bank lending, and its role in improving the monetary transmission mechanism.

Discuss the potential effects of negative deposit rates on the banking system in Europe.

What mechanisms does the ECB have to encourage banks to lend more?