, Jyske Bank's CEO Anders Dam said:"The negative interest rate environment that has affected the Danish market since the spring of 2012, only interrupted in 2014, now seems to be of a rather permanent nature."
"Market expectations indicate that the negative interest rate environment will last for several years." Dam said that in recent years Jyske's private banking arm has not been able to make money from deposits, citing a"large deficit" which keeps growing as clients deposit more.The logic behind charging customers to hold their money in the bank is simple. Banks tend to make a loss on providing current account services, but have traditionally been able to offset those losses through loans, mortgages, and other products that bring in interest and fees.
However, with interest rates at rock-bottom levels for several years now, providing a service that costs the bank money to customers for free is no longer financially viable.There is another reason behind the move. By making it cost money to save money, banks hope to encourage their customers to spend, putting money back into the economy and stimulating growth.
Central banks implementing negative rates on financial institutions aim to encourage them to lend money to customers, thus stimulating activity, and helping boost the economy. What Jyske Bank is doing is driven by effectively the same logic, but on a smaller scale.
not good
Not smart.
Maybe Trump can take out a nice 0 interest loan, or have Danish banks pay him to buy Greenland on their cash. It all makes sense now!
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