'Helicopter money' isn't on the cards for ECB

New minutes reveal that it is not opposed to sending rates further into negative territory however...

'Helicopter money' isn't on the cards for ECB

Picture by: Reed Saxon / AP/Press Association Images

The chief economist of the European Central Bank (ECB) has dismissed suggestions that the bank would consider implementing a policy of "helicopter money".

Speaking in Hamburg today, Peter Praet (pictured) said the policy was "not on the table, it's not even discussed".

The form of stimulus, which would involve the direct distribution of money to the public, has been a topic for discussion within economic and media circles in recent months.

ECB Vice President Vítor Constâncio, however, echoed Praet's sentiments in Brussels:

"We are not considering anything of that sort... Not on the table in any shape or form".

Last month, ECB President Mario Draghi said he found the concept "very interesting".

Freshly-published minutes from the ECB's meeting on March 10th reveal they are considering a continuation of subzero rates.

The 25-member governing council judged there was "little evidence of negative side effects" to the policy so far and that it "wouldn't rule out future rates as new shocks... might warrant further monetary policy action".

As per the minutes: "Policy rates remain part of the governing council's toolbox".

The introduction of the tiered deposit rate system favoured by the Bank of Japan, which would protect lenders from negative rates, was dismissed as too complex operationally.

The March meeting took place as Draghi announced a new kitchen sink approach to monetary policy as the ECB’s headline interest rate dropped to a record low of zero and deposits rates were slashed to -0.4.

Following the publication of the minutes, European equities were in the red and banks were underperforming, particularly the Italian likes of Banca, Banco Popolare, BMPS and Unicredit.