If anyone still had doubts, this week European Central Bank meeting was a convincing reminder that negative interest rate policies and quantitative easing are here to stay.
For the eurozone banking sector, this is a triple hit to profitability as reserves are taxed instead of being remunerated, interest rates are low and the yield curve is flat.
A modest consolation is the extension of the -1% rate on the ECB's long term refinancing operation (TLTRO) from June 2021 to June 2022. The money banks can earn by borrowing from the ECB more than compensates for the cost banks have to pay on heir reserves at the ECB.
This is the ECB’s own way to mitigate the cost of NIRP for the banking system, and this week's extension shows it is a key tool in the ECB's monetary arsenal to support the banking system and ultimately bank credit to the economy. 
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