What is the marginal lending facility rate?
The marginal lending facility rate is the interest rate banks pay when they borrow from the ECB overnight. When they do this, they have to provide collateral, for example securities, to guarantee that the money will be paid back.
The marginal lending facility rate is one of the three interest rates the ECB sets every six weeks as part of its work to keep prices stable in the euro area.
The other two rates are the rate for our main refinancing operations, which is the rate at which banks can borrow from the ECB for one week (this costs less than borrowing overnight), and the rate on the deposit facility, which defines the interest banks receive – or have to pay in times of negative rates – for depositing money with the ECB overnight.
Source: European Central Bank
Published: 13 Sep 2018
The above presentation was created for educational purposes.