Savers may not see interest income for a decade says banker
The eurozone's low-interest-rate environment might be here to stay for longer, a German bank CEO warns.
"Positive interest rates are virtually ruled out in the first half of the 2020s, if not for the entire next decade, given the prevailing monetary policy," said Michael Ruediger, head of DekaBank, at an event late on Tuesday in Frankfurt.
As global economic risks continue, central banks are pursuing an accommodating policy, the former Credit Suisse Group banker added.
He expects the European Central Bank to lower its deposit rate in September. "It may go much further than just 10 or 20 basis points," he said.
ECB president Mario Draghi and fellow policymakers said in July they expected borrowing costs to stay at present levels "or lower" through at least the first half of 2020, opening room for a September reduction in the deposit rate from the record low of minus 0.4pc.
Officials also signalled they will restart their bond-buying programme, if needed.
Lowering the deposit rate from minus 0.4pc to minus 0.5pc would cost eurozone lenders an additional almost-€2bn a year, according to Hans-Walter Peters, president of the Association of German Banks.
DekaBank is owned by Germany's public sector savings banks and had customer assets totalling about €300bn at the end of July.