Welcome to European Tribune. It's gone a bit quiet around here these days, but it's still going.
Currently the ECB's reserves are remunerated at the repo rate. Which means that, apart from the haircut, it's free for eligible banks holding eligible assets to satisfy reserve requirements. Which is why tapping the marginal lending facility should be a sign of distress (why pay 2% overnight when you can do a free weekly repo?). By the way, the ECB's reserve requirement is 2% of deposits.

Economics is politics by other means
by Carrie (migeru at eurotrib dot com) on Wed May 11th, 2011 at 03:54:43 AM EST
[ Parent ]

Others have rated this comment as follows:

JakeS 4


Occasional Series