Frankfurt / Main (dpa) - Will savers soon be punished for parking money in the account? What is already common practice for banks of major banks could also hit small savers in the foreseeable future. The policy is alarmed - and checks to ban negative interest by law.
Why is there any discussion about negative interest rates for small savers?
Banks have been under pressure for years: regulators' demands and expensive investments in digitization drive up costs. On the other hand, because of the low interest rates, the earnings break away. For a long time, the institutions were well credited for paying more interest on loans than paying for savings on their deposits. But the days of abundant interest surpluses are over. And the hoped-for turnaround will not happen for the time being: the European Central Bank (ECB) keeps interest rates at a record low even longer than expected.
What's up with the ECB's punitive interest?
Since mid-June 2014, commercial banks must pay interest when they park money with the central bank. The ECB is currently demanding 0.4 percent penalty interest. According to calculations by the Federal Association of German Banks (BdB), euro area banks are currently paying more than € 600 million a month in negative interest rates for excess liquidity to the ECB. Calculated over the year, a total of about 7.5 billion euros come together. Particularly affected by the penalty interest are German banks, which traditionally have a surplus of customer deposits. According to BdB figures, they carry about one third of the negative deposit interest rates in the eurozone.
Do bank customers already have to pay penalty interest?
Individual institutions have been passing the ECB's negative interest rates on to companies or large investors such as funds for some time. In some house also rich private customers are asked to pay. According to the financial portal Biallo, 30 financial institutions nationwide currently collect fine interest from private customers, including many savings banks and cooperative banks. Some of them start with credits of 100,000 euros, with other institutes the amount is significantly higher. Correspondingly, corporate clients and institutional clients such as funds are currently being passed on the costs of negative interest rates at 111 banks and savings banks. The majority of private customers have so far been spared interest on penalty payments. The German banking market is contested, the concern of the providers is great to bail customers.
Will small savers continue to be spared?
The longer the low interest rate lasts, the more unlikely it will be. In addition, pressure on the sector could increase: ECB President Mario Draghi has announced that the central bank could tighten the negative deposit rate - possibly at its next interest rate meeting on 12 September. BdB chief executive Andreas Krautscheid warned thereupon: "it could be that many banks in the long run no longer be able to handle, to pass on the additional loads also in the width to private customers." The president of the Association of German Cooperative Banks (BVR), Marija Kolak, stated that it is becoming increasingly difficult for banks to operate profitably - "especially if they do without the passing on of negative interest rates in retail business".
How does politics want to protect savers?
The Federal Government is exploring a possible ban on punitive interest for small savers. The Ministry of Finance has prompted an examination, "whether the Federal Government is legally possible at all to protect small savers from such negative interest rates," said Chief Executive Officer Olaf Scholz (SPD) of the Funke media group. Previously, there had been an attack by CSU boss Markus Söder. Bavaria's Prime Minister had announced a Federal Council initiative with the aim of exempting amounts up to 100,000 euros in principle from penalty interest. "Saving must be rewarded and not punished," Söder warned.
Is it possible to ban negative interest rates for small savers?
The lawyer Stefan Rizor holds a ban from the legal point of view conceivable: "One can limit the freedom of contract in principle, such a ban would not be unconstitutional from the outset, if well justified." An example of such a state procedure is the rental price brake.
What concerns are there against a ban?
"Legal prohibitions are alien to the system, they do not help the customer any further and can ultimately lead to dangerous instability on the financial markets," argues the German banking industry. Jürgen Gros, President of the Bavarian Association of Cooperatives, told Bayerischer Rundfunk: "I firmly believe that prohibitions can not be an instrument in a market economy, and that companies must be able to make good business sense." Stefan Schmidt, spokesman for financial consumer protection of the Greens in the Bundestag let explain: "If you forbid the banks to pass on negative interest, they will instead turn on the price screw" - that will make small savers even stronger.
Consumer advocates would have to find a ban good, right?
"A ban on punitive interest for small savers is well meant, but a pseudo solution," said the head of the Federation of German Consumer Federation (vzbv), Klaus Müller. "Negative interest rates for existing contracts are already illegal from the point of view of the vzbv."
Time series ECB interest rates
ECB rate decision 25.7.2019
Draghi inaugural statement 25.7.2019
Interview BdB Chief Executive Krautscheid
Communication Stiftung Warentest to Girokontentest
Biallo at penalty interest
Fratzscher in the "Passauer Neue Presse"
Söder in the "Bild" newspaper
Tweet Left-wing Vice De Masi
Communication Verbraucherzentrale Bundesverband