Senior European bankers have warned the European Central Bank of the dangers of negative interest rates ahead of a widely anticipated cut at the bank’s policy meeting today.
The ECB is expected to cut its deposit rate by 10 basis points to minus 0.4 per cent as it takes further action in its struggle to lift low inflation and boost economic growth back to normal levels.
Commercial bank executives are alarmed by the crippling effect on profits of negative rates which they cannot pass on to customers, adding to concerns about the fragility of financial stability in some parts of the eurozone.
But any attempt by the ECB to shield lenders from the effects of negative rates could weaken the policy and open it to claims that it is engaged in a beggar-thy-neighbour devaluation.
Andreas Treichl, chief executive of Austria’s Erste Bank, said another cut could encourage financial bubbles, hurt economic growth and create “social disparity” by penalising savers.
José García Cantera, Santander’s chief financial officer, added that the banks that would take the biggest hit to their profits if rates were cut again were those least able to bear it.
Sergio Ermotti, UBS chief executive, last week warned that excessively low rates were prompting banks to extend too many risky loans because they “don’t know what to do” with deposits.
奥地利第一储蓄银行(Erste Bank)首席执行官安德烈亚斯?特莱希(Andreas Treichl)表示，再次下调利率可能会助长金融泡沫，损害经济增长，并通过实际上惩罚储蓄者，制造“社会不平等”。
西班牙桑坦德银行(Santander)首席财务官何塞?加西亚?坎特拉(José García Cantera)补充说，如果利率再次下调，那些利润将受到最沉重打击的银行正是最无力承受的机构。