MNI BRIEF: BOE Work On Negative Rates Ongoing: Bailey

The Bank of England's work on negative interest rates is ongoing and in the meantime, the central bank has plenty of ammunition in its armory if needed, Bank of England Governor Andrew Bailey, said Friday.

The BOE did not publish any update in the Financial Stability Report or alongside it of its work on negative interest rates and their potential impact, or lack of impact, on financial stability. Bailey said that the work was ongoing with the Bank having consulted with financial sector institutions and he highlighted the importance of the idiosyncratic nature of national banking systems, and their reliance on retail deposits, in determining how effective negative rates are.

As rates move to and below zero "a lot of the research that has been done in the academic world … (shows that) the structure of the system, particularly the proportion of retail deposits … does become more important," he said.