Danske Bank Lowers Negative Rate Threshold, Denmark’s Business Minister Says ‘Enough is Enough’ – Bitcoin News
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In an aggressive attempt to combat the influx of cash on its way to cryptocurrencies, the Danske Bank, the largest bank in Denmark, has announced that it will lower the interest rate threshold from -0.35% to -0.50%. The move is intended to combat the growing popularity of cryptocurrencies like Bitcoin, as well as encouraging people to use more cashless payment methods. (When you consider the amount of money being invested in cryptocurrency, the interest rate is paltry, but it’s also enough to encourage someone to hold onto cash, as opposed to spending it immediately.)
Denmark’s central bank, DNB, now has a negative interest rate of -0.5%. This means it charges commercial banks 0.5% interest for money they keep on deposit with it. The country’s business minister, Brian Mikkelsen, believes this is too much. Mikkelsen feels that banks are already charging their customers too much for services, which has a negative impact on the overall economy, and has said “enough is enough”.
On the 26th. In April 2021, Danish multinational banking and financial services group Danske Bank announced in a press release that the institution had changed the thresholds for retail customers and the standard interest rates for business customers in Denmark. The Bank intends to lower the threshold for negative interest on deposits from DKK 100 000 to DKK 250 000 (USD 16 000 to USD 40 000).
Danish savers hit by negative interest rates this summer
A number of major financial institutions in Europe have switched to negative interest rates. Bitcoin.com News recently reported on the views of ECB President Christine Lagarde and how she defended negative interest rates. Ms Lagarde noted that this may be a concern for savers, but that the global economy should be put before savers. Moreover, the Bank of England (BoE) wants UK banks and building societies in the region to have negative interest rates by August 2021.
After financial institutions such as ING, Barclays and a number of Swiss banks, the Danish financial group Danske Bank also introduced negative interest rates for certain amounts of deposits at the end of April. In fact, Denmark was the first country to introduce negative interest rates on a large scale in 2012.
Under the new conditions, Dankse Bank deposits between DKK 100,000 and 250,000 (USD 16,000 and USD 40,000) will fall into the negative interest category.
The chart above shows Dankse Bank’s interest rates for business customers. For retail customers, the threshold for booking negative interest is DKK 100,000 and is calculated based on the total amount of deposits in all customer accounts. Any share of deposits in joint accounts is counted towards the DKK 100,000 threshold. Interest on deposits will remain unchanged at -0.6% per annum, according to the bank’s terms.
From 1. In July 2021, the interest rate conditions for standard deposits for retail and corporate customers will be changed. Mark Vraa-Hansen, head of personal banking at Danske Bank in Denmark, said higher interest rates impose costs on the institution.
We have had very unusual interest rate levels for a long time and there is no indication that this will change. At the same time, we are seeing a significant increase in excess deposits, which at current interest rates means significant costs for the bank, writes Vraa-Hansen. It is clear that this is not acceptable to us in the long term, which is why we are lowering the threshold for negative deposit rates, he added.
Danish economy minister says banks are too greedy
Negative interest rates are not normal and are not considered good financing for those who want to keep their money for the long term. Big savers who put large sums of money in the bank expect a return for holding their money, but the days when the rich could earn a decent passive income from traditional interest rates are over. With a negative interest rate of -1%, someone who invested $1,000 at the beginning of the year will only receive $999 at the end of the year.
Danish economy minister Simon Kollerup doesn’t like Danish banks charging their customers negative interest rates, and he recently called financial institutions greedy.
Proponents of negative interest rates believe they help housing startups, businesses and loans. It is assumed that those who benefit from negative interest rates (borrowers) will consume more and invest more in the economy. However, there are a number of people who oppose the introduction of negative interest rates by banks, and Denmark’s Economy Minister, Simon Kollerup, has said enough is enough.
Reuters reports that the Danish central bank has begun to introduce negative interest rates, forcing lenders to place funds at negative interest rates with the central bank, which has prompted most Danish banks to introduce negative interest rates for retail customers.
In a post on Facebook, Kollerup said he was outraged by the new trend. I think it should stop now. The limit has been reached, Kollerup said. It’s just too much to ask when the banks are making big profits but imposing negative interest rates on a growing number of Danes.
The Economy Minister said he had asked the Finance-Denmark banking association to resolve the issue as soon as possible. Denmark replied that it is fundamentally wrong for bureaucrats to interfere in the pricing of the monetary system. I look forward to hearing the industry’s response on how to stop this spiral, Kollerup said in his post on social media.
Ulrik Nodgaard, head of the Danish Financial Supervisory Authority, disagrees with Kollerup. Danish banks did not invent negative interest rates. They come from the Danish central bank, Nodgaard noted.
Danske Bank in Denmark charges a negative interest rate of -1% on all balances above 100,000 kroner ($16,000).
Of course, negative global banking rates have forced crypto asset proponents and precious metal enthusiasts to try harder. Proponents of Bitcoin believe that digital currencies give people the ability to save money again without it being taken away by negative bank interest rates and abusive fees.
Banks can also deny you access to the money you keep there and with the help of the state, they can take it away from you as well. Alternative investments, such as bitcoin and precious metals, are attractive because people can save money undisturbed and earn returns that current traditional financial institutions cannot offer.
What do you think of Danske Bank’s introduction of negative interest rates? Let us know what you think in the comments below.
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Negative bank interest rates, bitcoin, bitcoin (BTC), central banks, Danish krone, Danish financial services, Danske Bank, Denmark, Danish economy minister, Danish finance, gold, Mark Vraa-Hansen, negative interest rates, precious metals, Simon Kollerup, Ulrik Nodgaard
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