Skip to main content

German lenders offer low rates to savers.

 

German flag
Ger­man banks are reap­ing a wind­fall amount­ing to tens of bil­lions of euros by not passing on higher interest rates to their cli­ents, accord­ing to the head of the con­tin­ent’s largest retail deposit broker, Raisin.

Euro­zone lenders can now earn 2.5 per cent by depos­it­ing liquid­ity overnight at the European Cent­ral Bank, but Ger­man retail banks, on aver­age, pay only 0.07 per cent in interest to retail depos­it­ors, accord­ing to Raisin data.

Lenders in Ger­many, where mort­gage rates have almost quad­rupled in a year, will earn a wind­fall profit of about €40bn this year, accord­ing to Raisin cal­cu­la­tions.

«This is unfair from a con­sumer’s point of view,» Tamaz Geor­gadze, Raisin founder and chief exec­ut­ive, told the Fin­an­cial Times. Some Italian banks, for example, are pay­ing up to 1.5 per cent interest on overnight depos­its to retail savers.

Ger­man banks have in the past been more gen­er­ous to savers. Dur­ing the pre­vi­ous two peri­ods of rising interest rates, in 2008 and 2011, 30-40 per cent of the increases were passed on to retail cus­tom­ers, the Raisin data shows.

Raisin over­sees sav­ings assets of more than €30bn, up 20 per cent since mid2022. He warned that this situ­ation could, in time, trig­ger a reg­u­lat­ory back­lash.

«This is a polit­ical and a soci­etal issue,» Geor­gadze said, adding that large parts of the pop­u­la­tion were affected. «In Ger­many alone, some 80 per cent of cit­izens who have money on cur­rent accounts and overnight accounts are affected.» He said many held large parts of their wealth this way.

Banks needed to brace them­selves for polit­ical inter­ven­tion should they not become more gen­er­ous on their own, he said.

«In Ger­many, there are laws that pre­vent extor­tion­ate interest on credit but no rules for min­imum ones».

www.sba.tax

Labels:

Comments

  1. Anton7 March 2023 at 16:00

    Unfortunately there seems to be the need for political intervention in this case. Banks are not going to reduce their profits otherwise. In these particular and peculiar times banks must be generous or they should pay for being greedy.

    ReplyDelete

Post a Comment

Cloud Bookkeeping

HS2 cost cuts new routes and add delays.

 Trans­port depart­ment offi­cials have begun work on «Project Sil­ver­light» sug­gest­ing the high­speed rail scheme might face four addi­tional years of delay. The planned High Speed 2 rail line faces fur­ther delays of up to four years and more cuts to the project under plans being drawn up by min­is­ters to rein in its bal­loon­ing costs. The extra delays to the coun­try’s biggest infra­struc­ture project would mean that it would not be com­pleted until as late as 2045 — 12 years after ori­gin­ally planned. «This is a func­tion of infla­tion; we are hav­ing to find huge sav­ings because the cost of everything the depart­ment is already doing will have become so much more expens­ive by then,» said one gov­ern­ment offi­cial. In Octo­ber, the FT repor­ted that the Treas­ury had asked HS2’s man­age­ment team to identify poten­tial cuts or «scope reduc­tions» to the high-speed line. Trans­port depart­ment offi­cials have sub­sequently begun work on Project Sil­ver­light aimed at fi...
4 comments
Read more

Small business will be excluded from fraud law.

  Min­is­ters are plan­ning to exclude small busi­nesses from anti-fraud legis­la­tion by nar­row­ing the scope of a crim­inal offence tar­get­ing com­pan­ies that fail to pre­vent eco­nomic crimes. MPs and anti-cor­rup­tion cam­paign­ers had hoped the gov­ern­ment would seek to amend the eco­nomic crime and cor­por­ate trans­par­ency bill to ensure the new offence covered all com­pan­ies. The plans to limit the scope of the amend­ments will also dis­ap­point those who had hoped the legis­la­tion would remove key hurdles to the pro­sec­u­tion of white-col­lar crime. A new «fail­ure to pre­vent» offence for fraud would bring it in line with exist­ing sim­ilar cor­por­ate offences for bribery and tax eva­sion. At present, pro­sec­utors need only prove that organ­isa­tions lacked «reas­on­able» or «adequate» con­trols to pur­sue the offence in bribery and tax eva­sion cases. «It would be much more sens­ible for the gov­ern­ment to provide strong guid­ance for SMEs on what these pro­ce...
3 comments
Read more

Doubt on CS's collateral.

  Credit Suisse provided an emergency $140mn loan to Greensill Capital based partly on invoices to companies that deny ever doing the business stated on the documents. The Swiss bank provided the loan in October 2020, less than five months before the collapse of Greensill, a supply chain finance firm that counted former British prime minister David Cameron as a senior adviser. Invoices issued by metals magnate Sanjeev Gupta’s Liberty Commodities and sold to Greensill formed part of the collateral for the loan, according to documents seen by the Financial Times and people familiar with the transaction. Yet several of the parties named on the invoices have told the FT they did no business with Liberty. GFG has consistently denied any wrongdoing. Credit Suisse’s loan had a clause dictating that the collateral value had to be equal to or greater than the $140mn borrowed. The terms of the debt agreement only allowed invoices on Green-sill’s balance sheet to count towards this tally if t...
2 comments
Read more