European banks have transferred 21.4 billion euros ($24.2 billion) in revenues to the European Central Bank (ECB) in the five years since negative interest rates were introduced.
The ECB introduced negative interest rates on June 11 2014, lowering its deposit rate to -0.1% in a bid to stimulate the economy, and negative interest rates are currently at -0.4% on central bank deposits for 17 eurozone countries.
European banks paid a record 7.5 billion euros on their surplus deposits in 2018 alone, amounting to 21 million euros being paid to the ECB daily, according to a report from open banking platform Deposit Solutions. The report, which analyses ECB data, also shows charges having a considerable impact on banks' profitability, equating to a 4% decline in profits in 2018. German banks again bore the heaviest burden among major economies, losing 9% of profits.
In comments within the report, Deposit Solutions CEO Tim Sievers said banks should position themselves as platforms and offer customers a choice of third-party savings deposit products in order to reduce the negative rate burden.
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