Legal bans are no help

The German Banking Industry Committee (GBIC) comments as follows on the discussion about a possible legal ban on negative interest rates for deposits of less than 100,000 euros:

“In a market economy, banks – like all other businesses – calculate their prices and charges on their own on the basis of the market environment. That also applies in times of negative key interest rates that the banking industry cannot ignore. Legal bans are alien to the system, don’t help customers and may ultimately lead to dangerous financial market instability. Such proposals show how far the undesired side effects of the European Central Bank’s negative-interest-rate policy already reach.”