Les Echos: German banks no longer know where their accumulated cash mountains are kept

The French newspaper Les Echos said that what German banks suffer today is exactly what is known as the "problem of the rich", when data showed the German Central Bank that they have 43.4 billion euros (47.6 billion dollars) in cash, so that they no longer have enough space to store all this money, nor They must find new safes and call outside companies.

The newspaper pointed out that this amount is record and is three times higher than it was in May 2014, due to the European Central Bank setting negative interest rates, a policy confirmed by the European Commission last year in its economy weakened by trade tensions, according to the newspaper.

The newspaper quoted Bloomberg that several financial institutions had asked Pro-Orum to trade precious metals in Munich to ensure that the huge funds in their possession were kept, but the latter rejected the request, citing it was also suffering from storage difficulties.

Increased demand for safes
This is ridiculous evidence of the consequences of the interest rate policy approved by the European Central Bank, and these days it is better to keep the money in cash rather than depositing it with the European Central Bank, despite the risks and insurance costs, And logistical problems.

Opposition MP Frank Scheffler says that negative interest rates make the assembly process remarkable, and this is only the beginning, and if this continues, there will be a boom for the manufacturers of safes and security companies.

The newspaper pointed out that the matter is no longer only related to banking institutions, but that German individuals are increasingly using cash, because many institutions have already decided to impose taxes on the deposits of their customers.

"We have been seeing an increase in demand for our safes, often for storing money, this strong demand has been going on for months and we are continuing to increase our capacity," Marcus Weiss - a CEO of a company that offers solutions to store precious things in particular - told Bloomberg.

European banks - according to the newspaper - regularly report the difficulties they face in managing this accumulated liquidity that cannot be transferred into deposits, which compels them to resort to the European Central Bank to store the surplus or find other solutions to avoid paying deposit fees.

Expensive deposits
According to the Association of German Banks, the deposits will cost the country's banking institutions two billion euros annually, as a parliamentary investigation of negative interest rates revealed that the banking sector paid 2.4 billion euros to the European Central Bank in 2018 against the deposit fee.

The newspaper said that Germany is the country most affected by this phenomenon, due to a greater tendency of its citizens to save compared to other European countries, as the rate of savings reached 10% in 2017, which is nearly twice the average of the euro area.

In response to the criticisms leveled against him, the European Central Bank said that the interest rate policy adopted by it increased real GDP in the euro area by 2.7 points at the end of 2018, indicating that some institutions should focus on reducing their costs instead of blaming the bank and criticizing Monetary policy of the union.