Credit Suisse Will Charge Large Depositors for Cash Deposits
Credit Suisse becomes the latest bank to punish big savers.
Negative interest rates have forced Credit Suisse to charge interest on Swiss Franc balances above a certain level.
It will charge at a rate of -0.75% for balances above CHF 2 million and -0.85% for that above CHF 10 million. However, these rates will be effective November 15 (for business clients) and January 1, 2020 (for individuals).
Credit Suisse, a victim of persistent low interest rates
In this regard, Credit Suisse is probably simply passing on what it has had to pay to the Swiss central bank.
Banks such as UBS and Julius Baier had earlier passed on the cost to customers.
Credit Suisse explained. “As other banks have been doing for some time, Credit Suisse is introducing negative interest rates for clients with very high Swiss franc cash holdings. The reason for this is the persistent negative interest rate environment.”
Previously, in August, for the first time, Realkredit Danmark paid loan interest to customers, a fallout of the negative interest rate regime.
These kind of rates are “crazy.”
“Negative interest rates are crazy. That means money is not worth anything anymore,” said ex-Credit Suisse CEO Oswald Gruebel said in an interview earlier this month. “As long as we have negative interest rates, the financial industry will continue to shrink.”
However, in September, the next head of the European Central Bank, Christine Lagarde, wrote to the European Parliament. “On the one hand, banks may decide to pass the negative deposit rate on to depositors, lowering the interest rates the latter get on their savings. On the other hand, the same depositors are also consumers, workers, and borrowers. As such, they benefit from stronger economic momentum, lower unemployment, and lower borrowing costs.”
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