What should then be done to urge the banks to be more compliant? “The banks want to meet the wishes of their own customers as little as possible. That is difficult to understand. That is because they have too little competition. Fundamentally, the government must stimulate competition in the sector.
And what about the threat of State Secretary for Consumer Affairs Alexia Bertrand (Open VLD) to impose a higher minimum interest rate? “The government could decide that today or next week. What are they waiting for?”
But the European Central Bank can also do something, says Paul De Grauwe. “The ECB could say together with the national banks: we will reimburse the current accounts you hold with us, provided that the savings interest is also increased.” For a good understanding: that is not happening at the moment, but according to De Grauwe it is possible.
He dismisses the argument that banks have given cheap loans for years in the recent past. “That was a lesser period, but the banks did make a profit. So it is not the case that they suffered a loss.”
2023-05-19 19:00:00
#Economist #Paul #Grauwe #Bottom #line #banks #power
