UPDATE 1-Deutsche Bank CEO warns of serious side effects to ECB rate cut

(Recasts with Commerzbank CEO)

FRANKFURT, Sept 4 (Reuters) - The CEOs of Germany's two largest listed banks on Wednesday warned that a further cut in interest rates by the European Central Bank would risk serious side effects while having only minimal effect on the economy.

The stern message comes a week before an ECB policy meeting at which decision makers are leaning towards a stimulus package that includes a rate cut.

Deutsche Bank CEO Christian Sewing, speaking at a banking conference, said his bank's customers say they would not invest more if credit were 0.10 percentage points cheaper.

A rate cut would "only drive up asset prices and further burden savers", he said.

Lower rates would help those who are indebted or invested in assets, but the majority of the population would not benefit, he said.

"That divides society further," he said.

Commerzbank CEO Martin Zielke backed Sewing's stance.

"I also don't consider this a sustainable, responsible policy," Zielke said.

Banks in Germany and across Europe have long complained about ECB policy which requires banks to pay to park their cash at the central bank, hurting their profits.

Banks in Germany paid 2.4 billion euros to the central bank to hold cash in 2018, the German government said in response to a parliamentary inquiry on negative interest rates.

(Reporting by Tom Sims, Patricia Uhlig and Hans Seidenstuecker; editing by Elaine Hardcastle and Jason Neely)


More Related News

Racist German Shooter Exposes the Global Network of Hate
Racist German Shooter Exposes the Global Network of Hate

BERLIN-Late Wednesday night in the central German city Hanau, a gunman that police have identified as 43-year-old Tobias Rathjen opened fire at two shisha bars. They're the kind of places favored by people who enjoy a laid-back atmosphere as they puff tobacco bubbling through water-filled hookahs, and on any given evening, many of those folks may be from Turkish, Kurdish, or North African backgrounds. They're quiet places for conversation and minding your own business. Do Germans Know a Hate Crime When They See It?But Rathjen just started blowing people away. He first opened fire at a hookah bar called Midnight in the center of Hanau. He then drove five minutes away to the Arena Bar and...

Trump taps Richard Grenell as acting head of intelligence
Trump taps Richard Grenell as acting head of intelligence

Grenell, the U.S. ambassador to Germany, is an outspoken supporter of the president.

Trump Taps Richard Grenell as Acting Intelligence Head
Trump Taps Richard Grenell as Acting Intelligence Head

President Trump announced Wednesday that he is recalling the U.S. ambassador to Germany, Richard Grenell, to name him the acting director of national intelligence, confirming a New York Times report.> I am pleased to announce that our highly respected Ambassador to Germany, @RichardGrenell, will become the Acting Director of National Intelligence. Rick has represented our Country exceedingly well and I look forward to working with him. I would like to thank Joe Maguire….> > -- Donald J. Trump (@realDonaldTrump) February 20, 2020Grenell, an outspoken Trump ally, will replace Joseph Maguire, who took over as acting DNI after Dan Coats, the former Republican senator from Indiana,...

Merkel predicts
Merkel predicts 'very tough' EU budget summit
  • World
  • 2020-02-19 15:17:04Z

German Chancellor Angela Merkel said Wednesday that talks to set the European Union's budget for the coming seven years will be "very difficult" at an extraordinary summit beginning Thursday. Germany and Finland belong to the circle of mainly northern European EU members that pay more into the EU budget than they get out, known as "net contributors". Such countries are keen to cap spending at around one percent of the bloc's total GDP, while the European parliament has demanded 1.3 percent.

South Africa Risks Add to Rates Pressure, Central Bank Says
South Africa Risks Add to Rates Pressure, Central Bank Says

(Bloomberg) -- Sign up to our Next Africa newsletter and follow Bloomberg Africa on TwitterSouth Africa's rising country risk is putting upward pressure on interest rates, even as inflation expectations decline, with credit-rating companies contributing to the negative sentiment, according to the central bank.Moody's Investors Service cut its 2020 economic growth forecast for South Africa to 0.7% from 1% on Monday and said the nation's relatively high real interest rates are constraining expansion. The ratings company is the only major one that considers South Africa's debt investment grade, but that assessment is at risk after it changed its outlook to negative in November....

Leave a Comment

Your email address will not be published. Required fields are marked with *

Cancel reply


Top News: Economy