Pierre Wunsch, Belgian Central Bank Governor and member of the European Central Bank's Governing Council, said on the 8th that arguments by some ECB officials that the interest-free minimum reserve requirement imposed on private banks should be raised lack a clear basis and are unconvincing. In a speech in Brussels, Wunsch noted that if the increase currently being discussed among policymakers were implemented, the minimum reserve system could become a tool close to fiscal policy. He further expressed the view that it could even undermine the credibility of future asset purchase programs.
ECB official pushes back against raising the minimum reserve requirement, a policy stance that leans against tightening and thus against euro strength.
