Negative interest rates are fatal
Adam Pike, News Editor
25 Aug 2016, 10:23 a.m.
John Cryan, Deutsche Bank’s chief executive has warned negative interest rates are an accident waiting to happen. Cryan believes punishing savers will eventually will undermine the already fragile recovery.
The warning comes following the European Central Bank (ECB) decision to reduce the banks deposit rate to -0.4% and increase the size of their bond buying programme.
In an article in Handelsblatt, the bank chief said the current policies being adopted by the ECB are coughing off the recovery and weakening bank balance sheets.
Low interest rates have brought the insurance industry to its knees and Cryan believes negative rates will continue to decimate the pension industry. In March the ECB slashed its three main interest rates and ramped up its QE program to 80 billion euros a month.