Italian banks jumping into ECB arbitrage trade, market moves suggest
Share:
LONDON (Reuters) - A rise in overnight borrowing rates for trades that use Italian government bonds as collateral suggests that some of the country's banks may have started taking advantage of tiered ECB interest rates to make a profit.Tiered rates are one of the measures the European Central Bank has introduced to ease pressure on banks' margins caused by negative borrowing costs.The system allows eligible banks a 0% interest rate on part of the reserves they hold at the ECB, rather than..