The European Central Bank began charging banks interest on deposits in June 2014 to encourage them to lend more to companies and consumers. It hasn't worked... Deposits at the ECB by euro-area banks in excess of required reserves have jumped sixfold since the introduction of negative interest rates, while lending within the currency bloc has barely budged... Lending to nonfinancial companies and consumers, excluding mortgages, has been stuck at about 6.8 trillion euros since June 2014, ECB data show, despite the central bank's liquidity programs to encourage more of those loans...

When it went deeper into minus territory on March 10, the ECB said it would use similar criteria to determine if a bank qualifies for negative rates on money it borrows from the central bank. That means the ECB is now willing to pay banks to borrow at the same rate it charges for excess deposits they hold there. And it's willing to do so even if a bank isn't increasing lending, as long as the firm is reducing lending at a slower rate than in the previous 12 months.

"It looks like the ECB is just trying to stop the bleeding," said Silvia Merler, a fellow at Bruegel, an economic research group in Brussels. "They've basically done that with the previous liquidity programs too. They haven't managed to encourage more lending, but at least stopped the erosion that was going on."

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