Since the banking sector collectively must hold considerable excess reserves with the Eurosystem, money market rates have been pushed down to deposit facility rate: hence this rate has become the most important policy rate in the current environment.2 The deposit facility rate was cut from zero to minus 10 basis points in June 2014.
It was further cut to minus 20 basis points in September 2014, minus 30 basis points in December 2015 and the current value of minus 40 basis points in March 2016. A series of targeted longer-term refinancing operations (TLTROs) that were initially introduced in June 2014, with a mark-II programme announced in March 2016.