ECB to Lend to Europe's Banks at a Negative Interest Rate
The European Central Bank (ECB) will now essentially pay banks to lend out money by offering them financing at a negative interest rate.
The ECB announced Thursday it was creating a new targeted lending facility that will provide approximately 3 trillion euros ($3.3 trillion) in liquidity to banks at rates as low as negative 1%, so long as the money they borrow gets passed on via loans to businesses and consumers.
The decision came after the ECB ran scenarios and projections that showed that GDP in the Eurozone could shrink by as much as 12% in 2020.
Source Fool.com
