Rates can go lower, but there are side-effects, ECB's Lautenschlaeger says

Two top Eurozone officials said interest rates in the euro area can go lower, but cautioned there were ‘pros’ and ‘cons’ to such decisions.

Speaking at the annual press conference for the Single Supervisory Mechanism in Frankfurt, European Central Bank governing council member Sabine Lautenschlaeger said “you can always go lower with rates”, Market News International reported.

Nonetheless, she warned of the potential for negative side-effects, going on to explain that those consequences were “very important”, although other policies such as the ECB’s targeted longer-term refinancing operations had been beneficial for lenders by reducing their funding costs.