The ECB Spent Eight Years Below Zero, Then Raised Rates Faster Than Ever Before

Three rates, one that matters

The ECB sets three rates. The main refinancing operations rate, at 2.40%, is the headline figure most often quoted. The marginal lending facility, at 2.65%, is what banks pay to borrow overnight. The deposit facility rate, at 2.25%, is what they receive for parking money at the central bank.

Since 2014, when the banking system moved into persistent excess liquidity, it is the deposit rate that has governed what money actually costs in the euro area. Banks awash with reserves do not queue for refinancing; they park the surplus. The rate on that surplus becomes the floor under every other rate in the system. This study follows the deposit rate for that reason.

Eight years below zero

The deposit rate went negative on 11 June 2014, at -0.10%. It fell in four further steps — -0.20%, -0.30%, -0.40% — and reached -0.50% on 18 September 2019.

It stayed there until 27 July 2022.

For eight years, a commercial bank holding reserves at the ECB paid for the privilege. Negative policy rates began as an emergency measure and became the ordinary condition of European monetary policy for the better part of a decade. An entire cohort of borrowers, savers and treasurers learned their trade in a system where the floor rate was below zero.

Fourteen months

On 27 July 2022 the rate returned to zero. By 20 September 2023 it stood at 4.00%.

Ten increases, 450 basis points, fourteen months. Nothing in the history of the euro comes close: the rate had never been above 3.75% before, and had never moved this far this fast.

The pace is the finding. A central bank that had spent a decade signalling patience compressed a full tightening cycle into little more than a year.

The way back down

The first reduction came on 12 June 2024, nine months after the peak. Seven more followed, at intervals of roughly six to eight weeks through the first half of 2025, reaching 2.00% on 11 June 2025.

Then the cuts stopped. The rate held at 2.00% for a full year before rising to 2.25% on 17 June 2026 — the first increase since the 2022-23 cycle, and the reason this series is not simply a story of tightening followed by normalisation.

What a policy rate does and does not tell you

The deposit rate is an instrument, not an outcome. It says what the central bank charges, not what a household pays for a mortgage or a firm pays for working capital. Those depend on the rate banks add on top, which varies by country, by borrower and by collateral.

Nor does the level alone say whether policy is tight or loose. A rate of 2.25% means something different when prices are rising at 2% than at 8%. What the series does record, unambiguously, is the sequence of decisions and their timing — the one thing a central bank controls directly and announces publicly.