German savers need not reckon with negative interest rates
German Finance Minister Olaf Scholz on Thursday sought to calm savers worried that the ever-lengthening period of low interest rates in the euro zone could see them paying negative interest on their deposits.
The ECB on Thursday promised an indefinite supply of fresh asset purchases and cut interest rates deeper into negative territory as it tries to prop up the ailing euro zone economy.
“Most contracts that customers have with their banks do not currently allow such penalty rates, so the problem is not acute,” Scholz said. “Banks’ boards are wise enough to grasp what they would trigger with such penalty rates.
“I don’t think private customers in Germany need to reckon with negative interest rates across the board. We are monitoring the situation and are considering our options to act,” he added.
But Bundesbank board member Joachim Wuermeling struck a different tone. “Banks could soon pass on lower interest rates to even more customers,” Wuermeling told Focus magazine.
Nobody should be surprised if banks demanded higher fees and were mulling negative interest rates, Wuermeling said. “It may be necessary from a business and banking supervisory point of view,” he added.