ECB Wunsch Opposes Higher Bank Reserve Charges
European Central Bank policymaker Pierre Wunsch has criticized proposals to increase unremunerated reserve requirements for commercial banks. He warned that higher charges risk damaging future central bank credibility and could stray into fiscal policy.
European Central Bank policymaker Pierre Wunsch pushed back against a proposal to increase bank reserve charges, warning it threatens central bank credibility. The policy debate centers on requiring commercial lenders to hold more excess liquidity in unremunerated accounts to curb ECB losses. Over €2.1 trillion in excess liquidity remains in the financial system, driving up national central bank interest expenses.
