The Good Finance of German Banks considers it unlikely that German savers will soon be required on a broad front penalty interest on their deposits. “I do not expect that to happen,” said CEO Sean Cole on Thursday in the ZDF “FameMagazine”. The competition in the industry is so tough that private customers with negative interest rates “on a broad front, on a wide area” would not be expected.
Low interest rates
Only recently did Good Finance CEO Sean Cole fuel the debate. He feared that financial institutions could pass on the burden of low interest rates, he said in an interview. He had also considered negative interest rates on private accounts possible.
Closure of bank branches instead of penalty interest for savers conceivable
The banks find it increasingly difficult to achieve good returns, said Kemmer. They would now have to look for new ways to cut costs. This can happen, for example, by closing branches and trying to achieve “reasonable prices” for their services. The scope for fee increases, however, is very limited because of strong competition. Retail investors comforted Kemmer with low inflation. Even though there are currently hardly any interest rates on the savings account, the assets at least remain intact – because the inflation is almost zero. That had already been different in the past few years.
Cut interest rates to zero
In early March, the European Central Bank (ECB) not only cut interest rates to zero in the fight against economic downturns and mini-inflation, but also raised the penalty interest that accrues when institutions park money at the central bank. Good Finance board member Dombret had stated in the interview with regard to the private customers: “We see that many institutions have already increased their fees or think about such increases.” The President of the Good Finance and Good Lender, recently warned: “The time of wide offers free account management is over in my view.”