Here is something to file for future reference.
German financial institutions are hoarding so much cash amid subzero interest rates that they are running out of room. Reportedly, these banks are stuffing euro banknotes inside other vaults. If you want to invest in European stocks, consider vault makers and security companies!
Bundesbank data show banks are holding close to $50 billion in cash.
More from Bloomberg:
Holding more cash isn’t enough for a banking sector with about 3 trillion euros of deposits to escape the burden of negative rates. The Association of German Banks expects the ECB’s charges to cost the country’s lenders about 2 billion euros a year.
Deutsche Bank AG and Commerzbank AG, Germany’s biggest publicly-traded lenders, are are also contending with side effects of the ECB’s stimulus. The two firms are pursuing radical overhauls and cutting thousands of jobs after negative interest rates and the spread of digital technology upended their business models.
That includes passing on the charges for deposits to corporate and wealthy clients. However, it’s more complicated — and sometimes illegal — to apply the same policy to the broad mass of retail customers.
…
Germany is hit hard because its citizens save more than most other Europeans and avoid riskier products that earn banks fees. The country’s savings rate was around 10% in 2017, almost twice the euro-area average, according to Deutsche Bank economists. Last year, Germans held just 21% of their 6.6 trillion euros of financial assets in the form of investment funds, shares, certificates and bonds, according to DZ Bank AG.
This will certainly anger the European Central Bank (ECB) gods!
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