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Banks

Loans with negative rates would be 'a perversion', ECB's Nowotny says

President of the Austrian National Bank and European Central Bank Governing Council member Ewald Nowotny attends a news conference in Vienna, Austria June 6, 2016. REUTERS/Leonhard Foeger

VIENNA (Reuters) - Consumer loans with negative interest rates would be “a perversion”, one that has not happened even in negative-rate trailblazer Switzerland, European Central Bank Governing Council member Ewald Nowotny said on Thursday.

“I believe it would be a perversion, an economic one, for loan rates to suddenly be negative. It totally goes against the economic nature of a loan,” Nowotny told an economic conference in the Alpine resort of Alpbach.

“In Switzerland that has been ruled out for loan agreements for a long time. Now it has been ruled out for Austrian loan agreements,” he added.

Reporting by Francois Murphy and Kirsti Knolle; Editing by Richard Balmforth

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