“ECB President Lagarde Urges Banks to Increase Deposit Rates Amidst Rising Interest Rates”

The growing increase in interest rates should be accompanied by an increase in the remuneration of savers’ bank deposits. He stated it the president of the ECB, Christine Lagarde who on Tg1 where he also expressed all his solidarity with the people of Emilia-Romagna. We have no alternatives – he said -. The only tool we have to deal with excessively high inflation is interest rates. But if these increase, citizens’ deposits and savings should be remunerated more. There is a need for a dialogue between banks and customers», underlining that «it is the least privileged and the most fragile who pay the highest price of inflation and we want to bring it back to 2% as quickly as possible».

Even the Economy Minister Giancarlo Giorgetti, on the occasion of the Ecofin meeting in Brussels, had raised the case and asked Italian banks to increase deposit rates and adjust them to the ECB’s increases, highlighting a non-alignment between lending rates which rapidly rose following the ECB’s monetary tightening , and those on deposits remained unchanged, despite the monetary policy adjustments. For this reason, there has been talk of the possibility of a tax on bank extra profits for some time.

Only a few weeks ago, in fact, the European Central Bank decided to increase i interest rates in the euro area of ​​25 cents, bringing the reference rate to 3.75%. This is the seventh increase in just 10 months, after in July 2022, after years of negative rates, the ECB had raised the cost of money for the first time from zero to 0.5%.
But not only Europe. TOEven the Fed in the US had approved 24 hours before the ECB raising the federal funds rate by 25 basis points to a range of 5% to 5.25%.