In an interview with Bloomberg, Sampo, which owns a major stake in Nordea, believes that banks will eventually have to pass on negative interest rates to private customers. Sampo CEO Kari Stadigh has said he does not believe such a move would necessarily destroy retail banking. “People would actually then have to pay for their deposits, so actually it could even bring stability to the banking sector.”
Nordea, SEB, Handelsbanken and Swedbanken have all told Svenska Dagbladet, however, that they have no plans to pass on the negative rates.
Sweden’s central bank, the Riksbank, has rejected the findings of a study co-signed by former US Treasury Secretary Lawrence Summer which criticised negative interest rates and drew the conclusion that they are harmful to the economy because they hurt bank profits, reports Bloomberg.
Riksbank Deputy Governor Kerstin af Jochnick says the study has looked at the wrong data and has therefore missed the fact that negative rates have contributed to keeping amortisation rates down.
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