Negative interest rates are the key differentiator preventing European banks from presenting any serious challenge to their American counterparts, according to ABN Amro CEO Kees van Dijkhuizen.
to -0.5%, the lowest in history, and launched a massive quantitative easing program in a bid to stimulate the euro zone economy.
"It is not something people like, you have to explain it, and it is a difficult environment for banks to make money," van Dijkhuizen told CNBC at the World Economic Forum in Davos. However, van Dijkhuizen said that this is also "not easy for governments" and suggested that the economic outlook is "not so bad" compared to what was expected this time last year, which could offer upward momentum to the rate environment.
Asked whether tax cuts similar to those deployed in the U.S. could be a solution, van Dijkhuizen highlighted that this is not often talked about as a possibility in Europe, with policymakers instead focusing their discussions around infrastructure, particularly in Germany and the Netherlands.
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