ECB to Discuss Higher Bank Reserve Requirements, Lagarde Says

ECB President Christine Lagarde said the central bank will discuss increasing the minimum reserves banks must hold, according to a report. The move would cut the ECB's interest expense and ease losses at national central banks, Lagarde said.

Higher reserve requirements mean lenders park more money at the ECB without earning interest. That reduces the amount of excess reserves on which the ECB pays its deposit rate, currently 3.75%. The savings would flow through to national central banks, which have booked losses from the ECB's high interest payments on bank reserves.

Lagarde did not specify a timeline for the discussion or the size of any potential increase. The ECB's minimum reserve ratio currently stands at 1% of certain liabilities.