One of Germany’s largest cooperative banks has begun charging its retail customers a negative interest rate. While the European Central Bank cut the deposit rate to a record low, other major banks could follow it up. Deutsche Bank recently said that it needs to be “much more robust about passing on negative rates.”
Berliner Volksbank
Describing itself as “the largest regional cooperative bank in Germany”. Berliner Volksbank is one of the largest German cooperative banks. Total assets are approximately 14 billion euros (~$15.4 billion). The bank started applying a minus 0.5% rate on deposits exceeding 100,000 euros (~$110,000) last week, effectively charging customers half a percent to hold their savings.
So far, most German banks have not passed on the negative interest rate burden to retail customers, opting to absorb the costs themselves to uphold their reputation and prevent mass withdrawals
Negative interest rates are crazy. That means money is not worth anything any more … As long as we have negative interest rates, the financial industry will continue to shrink.
a former Credit Suisse CEO and an ex-executive of UBS Group AG
Meanwhile, German Finance Minister Olaf Scholz said last month that he had told banks not to pass on the ECB’s negative interest rates to savers. He was quoted by Reuters as saying:
I told [the] bank chief very clearly that it would be a fairly bad idea to react by slapping negative rates on millions of savers.
Source: Bitcoin
