The pressure on the banks is great: In Baden-Württemberg, penalty interest rates are no longer a taboo, even for private customers. Nevertheless, this should not affect normal savers.
NNegative interest rates should soon also become an issue for private customers of banks and savings banks. “We don’t want that. But if this interest rate is continued on a long axis, then the economic pressure will be so great that no one can escape negative interest ”, said Peter Schneider, President of the Baden-Württemberg savings bank association at a press conference in Stuttgart. For five years now, banks and savings banks have been paying penalty interest on their deposits at the European Central Bank, currently it is 0.4 percent.
In many cases, these costs are passed on to corporate customers who place their liquid funds in safekeeping with banks and savings banks, and even very wealthy private customers have had to reckon with fees. However, negative interest rates have been taboo for average savers. Legally, the institutes are on uncertain ground, the custody fees for deposits are auxiliary constructs, said Schneider. If the interest rate situation remains like this, however, the legislature is required to clearly regulate the handling of negative interest rates. For a long time there was still the expectation that there might be a turnaround in interest rates, the opposite is likely to happen.
An end to the special conditions?
This Thursday’s ECB meeting is expected to set the course for a further reduction in the deposit rate. With a view to this development, Marija Kolak, President of the Bundesverband der Volks- und Raiffeisenbanken (BVR), recently questioned the five-year-old practice of dealing with negative interest rates this procedure would be necessary. Every VR bank decides for itself as an independent company, said the BVR President when asked whether something like a “concerted action” is conceivable for many banks in Germany.
For Baden-Württemberg’s Sparkasse President Peter Schneider, however, it is clear that there could be a domino effect if a relevant bank starts with it. “We don’t want it, we’re called Sparkassen,” said Schneider. However, if one of the relevant competitors should demand penalty interest from private customers, one would have to follow suit – otherwise the savings banks would be flooded with deposits, according to the logic. Even within the LBBW Group, in which the Baden-Württemberg savings banks are involved, there is a lot of thought about penalty interest.
Michael Horn, who is responsible for business with private and business customers on the LBBW Board of Management, told the “Stuttgarter Nachrichten” that the customers provided the institute with “so much money that we couldn’t help but get some of it from the ECB ”, which requires 0.4 percent annually. So far, the bank has borne the loss, but this has its limits. Horn announced that negative interest rates should not affect small savers.