During the height of the euro-are crisis, deposits at the ECB's deposit facility surged above €800 billion because:

Question

Quizplus · Accepted Answer

During times of economic uncertainty, commercial banks may prefer to hold deposits at the central bank as it is considered a safe haven. This was the case during the euro area crisis and led to a surge in deposits at the ECB's deposit facility. The deposit rate was already at 0%, so option A is not correct. Option C may have also happened to an extent, but it is not the main reason for the surge in ECB deposits. Option D is not correct as there were no policy changes during that time that compelled banks to increase their deposits at the ECB.

During the Height of the Euro-Are Crisis, Deposits at the ECB's