Global Market: ECB signals future debate on raising bank reserve requirements to reduce central bank losses

ECB President Lagarde confirmed that doubling the minimum reserve requirement for eurozone banks from 1 percent to 2 percent remains on the agenda for future Governing Council discussions, with a decision expected in autumn. Reuters estimates this could save the Eurosystem nearly 4 billion euros annually by forcing banks to park more deposits in non-interest-bearing reserve accounts. The proposal aims to address mounting losses at national central banks, particularly in Germany and the Netherlands, caused by the mismatch between low-yielding stimulus-era bond holdings and high interest paid on bank deposits.