Banks pass the pain of negative rates to their depositors
Any market sell-off in advance of coming recession will raise the cost for banks of holding their customers’ cash and make them look again at open banking.
Jyske Bank announced on August 20 that it will begin charging affluent retail customers up to 60 basis points on deposits above DKK7.5 million ($1.12 million).
More attention than usual has suddenly focused on the third largest bank in Denmark, because chief executive Anders Dam, in an interview broadcast on the bank’s investor relations site, refused to rule out extending negative deposit rates to regular retail customers.
“We hope it won’t be necessary, but we can’t promise it won’t be,” he said.
Negative rates are hardly new. The Danmarks Nationalbank was one of the first central banks to implement them in July 2012 amid fears that the spillover from the eurozone crisis could drive up the Danish krone.