Italian banks exploit ECB tiering to sharply boost local deposits


Italian banks sharply increased their excess reserve holdings at the Bank of Italy following the introduction of the European Central Bank’s two-tier rates system on October 30, highlighting a possible conundrum for policy-makers.

Between October 30 and November 8, commercial banks increased their liquidity holdings at the national central bank by around €52 billion ($57 billion), according to data published by the ECB on November 12.

On October 30, the ECB’s two-tier system came into force

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