ECB's Constancio says there are limits on negative rates

(Reuters) - There is a limit on applying charges on banks for parking money with the European Central Bank, the ECB's vice president said on Wednesday.

"There are clear limits to the use of negative deposit facility rates as a policy instrument," Vitor Constancio said in a speech delivered in New York.

"First, there is always the possibility of hitting the limit where the preference for cash withdrawals would set in. Second, the instruments should not push banks to pass on their additional direct costs."

(Reporting By John O'Donnell; Editing by Chris Reese)

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