7.5 billion Euro will be transferred to banks in the Euro-zone this year to the European Central Bank (ECB). Reason: The negative interest rate of minus 0.4 per cent for deposits of the institutions at the ECB. With the negative interest rates should actually be avoided, that the institutions carry the money to the ECB. They should be stopped, on the contrary, to give the money as loans to consumers and businesses in order to stimulate the economy. However, because the demand is not so high and the cash and cash equivalents are so luscious you can carry it to the Central Bank. In the USA, the situation is quite different. The banks get in this year, the Central Bank, the Fed, interest in the amount of 43 billion dollars (38 billion euros) for their deposits, the Bank Association. The negative interest rate is a thing of the past, the Fed has increased interest rates several times. “This results in a difference of around 50 billion to the detriment of European banks,” complains Christian Ossig, Director of the Federal Association of German banks for the umpteenth Time. “The ECB needs to take the negative interest rate back quickly,” he said on Monday in Frankfurt.
For the period from 2014 up to and including the end of 2019, the Association calculated that even an interest rate advantage for the US banks of around 100 billion dollars. “This is a huge competitive advantage for US institutions”. And it is the view of the Bank lobby, there is a reason for the poor results of the German Institute. Also, Deutsche Bank Supervisory Board chief Paul Achleitner had recently complained of this disadvantage. The ECB would not require negative interest rates would increase the profit of the Deutsche Bank’s “night of a billion amount,” said Achleitner.
An end to the negative interest rates is not in sight
of Course, it is not anticipated that the ECB releases this year from a negative rate of interest. And also at the first meeting of the governing Council this year, on Thursday, the ECB has not changed the Penalty rate. Possibly can imagine Economists that the negative interest rate is lowered in the second half of the year, from minus 0.4 to minus 0.3 percent. Even otherwise, the Bank’s Association with the current environment for the banking business. The European financial market was a “patchwork”, cross-border banks in Europe could not be still. Therefore, cross-border mergers of banks according to Ossig is currently little sense. Economies of scale were not usable, because the institutions in each country hold the capital and this could not be controlled centrally at the group level.
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base rate of the European Central Bank monetary policy of the ECB is to remain a longer period of time loose
To be silent on a possible merger of the German Commerzbank and the Bank Association. However, it is gratifying that the policy deal more with the banks, not only in view of possible mergers, says Co-Association managing Director, Andreas Krautscheid. Finance Minister Olaf Scholz confirmed for months, the need for a strong institution and advertises indirectly, for a merger of Deutsche and Commerzbank. “The problems of the banks are perceived to be in Berlin again,” said Krautscheid. There you realize that the regulation of banks on the economy as a whole by beat.
