The European Central Bank’s loose monetary policy is having a serious effect on Germany’s savings and cooperative banks, a Handelsblatt survey shows. Faced with negative interest on their ECB accounts – essentially a fine for depositing reserves with the ECB – German banks have passed on the charges to corporate customers, forcing them to pay for the money they deposit in their accounts.
Most of Germany’s biggest commercial banks have already slapped charges on deposits over the past year. Now, the biggest savings and cooperative banks in the country are following suit. Eight of Germany’s 10 largest savings banks are now charging their largest customers, the survey shows.
That includes charging their municipal customers, meaning cities and regional authorities – a particular paradox since savings banks tend to be owned by the local governments themselves. Cooperative banks, known as Volksbanken in German, are owned by their members, which could also include municipalities.
Effectively, that means local governments are paying the fees to themselves.