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Banks

Hope for European banks hit by rock-bottom interest rates

European banks

Rock-bottom interest rates hurt more big European banks in 2016 than in the previous year, but the worst could soon be over with the prospect of rising borrowing costs rippling from the US to Europe.

Low rates, money printing and a penalty charge for hoarding cash have been at the heart of attempts to reinvigorate the 19-country eurozone economy in the wake of the 2008-2009 debt crisis.

But the policy has been politically divisive, prompting fierce criticism from famously thrifty Germans as the returns on savings in Europe’s biggest economy dwindled to nothing.

It also imposed a heavy cost on still fragile banks, turning deposits into a hot potato that many would rather avoid so as not to pay charges to their central bank for storing them.

Last year marked the ebb, according to a survey by Reuters of 20 large European banks conducted in mid-February.

Paul

The author Paul