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Profitability is now the most important challenge facing the eurozone’s banks, France’s top central banker has said, in an acknowledgement of the pain caused by low interest rates.

Banks across the single currency area have come under pressure from a host of factors including the European Central Bank’s ultra-low interest rates. The benchmark interest rate in now zero.

François Villeroy de Galhau, head of Banque de France and a member of the ECB’s governing council, is thought to be one member of the council keen to review plans to hold interest rates at their current lows at least until the end of its bond buying programme.

The review would focus on the ECB’s deposit rate. In the summer of 2014 the ECB became the first major central banks to cut rates below zero and now imposes a levy of 0.4 per cent on lenders’ deposits.

Mr Villeroy de Galhau said on Wednesday that both he and ECB president Mario Draghi had “clearly stressed the limits of negative rates”.

However, he signalled that he would not yet push for a full discussion at the council, saying it was necessary for the ECB to keep its ultra-loose monetary policy in place for now.

The average return on equity for banks had, he said, stagnated at 5 per cent in part because of low interest rates. But he downplayed the importance of monetary policy on banks’ balance sheets, saying:

The overall impact of our non-standard monetary policy measures on bank profitability is expected to be modest for the period 2014-17.

Some central bankers, including the heads of the Austrian and Italian central banks, have openly mooted changing the sequencing of the ECB’s exit from its extraordinary monetary stimulus and raising the deposit rate before the end of quantitative easing.

So far senior ECB officials have indicated they plan to stick with the current guidance to keep rates on hold at least until the programme ends. The ECB plans to buy €60bn of bonds each month from now until the end of the year. Its bond purchases are expected to continue into 2018, but possibly at a reduced pace.

Mr Villeroy de Galhau also warned the UK that it should not expect to have the benefits of economic union without membership of the EU. “There can be no cherry picking, no free riding,” he said.

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