ECB's Jazbec finds negative rates 'difficult concept'

By Laura Noonan and Matt Robinson

LJUBLJANA (Reuters) - Charging banks to deposit money at the central bank is a "very difficult concept" and any move in that direction is "very far away", European Central Bank Governing Council mem'ber Bostjan Jazbec said on Friday.

Jazbec, who also runs the Slovenian central bank, also said in a Reuters interview that there was no reason right now to take extreme measures.

The ECB has insisted that negative deposit rates are part of its arsenal, but has shied away from the measure so far.

In a Reuters poll this week, two out of 22 money-market traders said that negative deposit rates would be the best tool at keeping a lid on interbank lending rates.

"I find negative interest rates a very difficult concept to understand, personally," Jazbec said.

"I think it would be irresponsible for me as a governor if I haven't explored all different possibilities. And yes, negative interest rates could be there, but I think that we are still very far away from any extreme measure in my view."

On Thursday, ECB Executive Board member Joerg Asmussen said the bank could charge for depositing money but should be cautious about embarking on that course of action.

The ECB cut its main refinancing rate to 0.25 percent in November, but kept its deposit rate at zero, where it has been since July of last year.

ECB President Mario Draghi said last week the Governing Council had a brief discussion about negative deposit rates in its December meeting.

Jazbec, who announced a 4.8 billion euros recapitalisation of his banks on Friday to help them recover from poor corporate lending, said that the ECB provision of more long-term loans to help small businesses could be a useful tool.

"I'm in favour of any support for the real economy and if this materialises in a good direction then yes, of course that would be good for the economy," Jazbec said.

(Writing by Sakari Suoninen; Editing by Louise Ireland)