Negative rates put on hold for now

Negative rates put on hold for now

Greek banks are waiting before taking the option of imposing negative interest rates on corporate deposits, in order to see how the inflation situation develops and the attitude of the European Central Bank on its key interest rates.

The prospect of inflation remaining at high levels, carrying along the main interest rates, would influence the lenders’ decisions that sources say are on ice for now without being annulled.

Kathimerini understands that Greek banks are prepared in technical and legal terms for the application of the measure, which has been common practice for several years in major European countries, while negative rates have also been applied by banks in some smaller nations, such as Bulgaria and Cyprus.

The measure concerns the imposition of a commission, for example of 25 basis points, on corporate deposits above a certain level, e.g. 10 million euros. Bank officials stress that this “would not be extended to the deposits of households, that already have near-zero interest and will not be affected.

Notably corporate deposits continued to grow amid the health crisis and at end-November they exceeded €42 billion, a 20-year high.

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