NEGATIVE INTERESTRATES MAY HURT

EUROPEAN CENTRALBANK

Originally posted on telegraph.co.uk

Created by: Manisha Dorawala

Deutsche Bank's chief executive haswarned of the "fatal consequences" ofthe European Central Bank's negative

interest rate policy, which he saidpunished savers and could even

undermine the recovery.

John Cryan said the ECB's decision tocut its deposit rate to a record low of-0.4pc and an escalation of its bond-

buying programme was “workingagainst the goals of strengthening the

economy and making the Europeanbanking system safer.”

In an article for German newspaperHandelsblatt, he said: “Monetary

policy is thwarting goals to strengthenthe economy and to make banks safer

by now”.

While Mr Cryan praised the centralbank for helping to revive the

economy following the financial crisis,he said low rates had dire implications

for savers and pension plans.

Mr. Cryan said the policies alsoencouraged companies to "refrainfrom investments due to ongoing

uncertainty".

Larry Fink, the chairman of Blackrock,the world's largest asset manager, has

also described the growing trend ofnegative interest rates as a “worrying”.

He said the policy had "potentiallydangerous financial and economic

consequences" as investors take biggerrisks to generate returns.

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