The introduction of negative interest rates in the euro zone has been "broadly" beneficial for banks , according to the minutes of the latest meeting of the European Central Bank's Governing Council.
The document, released Thursday afternoon, detailed the differing views in the council ahead of the slew of measures it announced last month to tackle fragile growth and deflation.
The most controversial of the measures was a cut in its deposit rate, deeper into negative territory. A negative rate effectively charges lenders who park cash at the central bank and many analysts were concerned that this could dent revenues at organizations that were yet to fully rebalance after the euro zone sovereign debt crisis.
However, the minutes showed that a "number of arguments were put forward pointing to the benefits of a further cut in the deposit facility rate."
"Lowering the rate further into negative territory was seen as an effective tool for providing additional monetary easing, which also reinforced the impact of the other monetary policy measures in place by stimulating the 'velocity of reserves'," the minutes said.
"As regards the possible impact on banks' profitability, a general equilibrium perspective was warranted that went beyond the direct effects of negative interest rates on the profit and loss account of banks. Taking a broader view, on balance, the combination of all monetary policy measures taken, including negative rates, appeared to have contributed positively to banks' profitability thus far."
A further cut?
This was evidenced by overall increasing net interest income and banks' return on equity in the course of 2015, it said, which was the first full year of negative rates.
The minutes added that banks "appeared to benefit from the low interest rate environment" as lower revenues were "more than compensated for" by lower costs of funding and an expansion in credit volumes.
Despite the reasoning, there was still caution from some inside the Frankfurt-based institution. The minutes stated - without revealing individual names - that concerns were raised about possible undesirable side effects that could arise from moving further into negative territory.
"A further cut in the deposit facility rate could unduly increase the pressure on banks' profitability, which could have adverse effects on the stability of the banking sector," it said.
Cutting interest rates further, in a market environment where uncertainty about the impact of negative rates prevailed, could also further exacerbate financial market volatility and have direct, negative repercussions on the confidence of euro area households and firms."
Mitigate effects?
There was also caution over potential further rate cuts, something President Mario Draghi even alluded to during his press conference on March 10. But the bank would not rule out future cuts in policy rates, saying "new shocks could change the outlook for inflation, which might warrant further monetary policy action."
The euro edged slightly lower against the dollar and traded at 1.1362 at 1:30 p.m. London time.
In March, the ECB announced a greater-than-expected range of stimulus measures aimed at boosting a fragile recovery in the region. It announced it had cut its main refinancing rate to 0.0 percent and its deposit rate to minus-0.4 percent.
The bank also extended its monthly asset purchases to 80 billion euros ($87 billion), to take effect in April. In addition, the ECB added corporate bonds to the assets it can buy — specifically, investment grade euro-denominated bonds issued by non-bank corporations. These purchases will start towards end of the first half of 2016. Plus, the bank will launch a new series of four targeted longer-term refinancing operations (TLTROs) with maturities of four years, starting in June.
Frederik Ducrozet, a euro zone economist with private Swiss-bank Pictet, said in a note last month that other ECB measures - including its bank lending program - would mitigate the adverse consequences of negative rates.
—CNBC's Katy Barnato contributed to this article.