Negative ECB rates fuel demand for safe deposit boxes: German banks

18 Mar, 2016

The European Central Bank's negative interest rates are sparking demand for safe deposit boxes, where bank customers can store cash to avoid the prospect of paying the bank interest on their accounts, German bankers said.
The ECB last week cut its main interest rate to zero and dropped the rate on its deposit facility to -0.4 percent from -0.3 percent, increasing the amount banks are charged to deposit funds with the central bank.
"Lockboxes are in vogue," Hans-Bernd Wolberg, the chief executive of German regional co-operative lender WGZ, told a news conference on Thursday.
Some of WGZ's industrial or medium-size corporate depositors are being charged negative rates for large deposits on a case-by-case basis, but so far retail depositors have been spared.
German reinsurer Munich Re this week said it was increasing its gold and cash reserves in the face of the ECB's negative rates.
Some Germans public-sector savings banks in Bavaria have already studied whether they should store cash in their own safes rather than deposit it with the ECB, Georg Fahrenschon, the head of the DSGV savings bank association, said this week.

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