“Why Professor De Grauwe believes banks can raise interest rates to 1.5% on savings accounts”

According to Professor of Economics Paul De Grauwe, the banks do have the margin to raise interest rates. He advocates an interest rate on savings accounts of 1.5 percent. Banks would currently make about 8.4 billion euros extra profit due to the higher ECB interest.

“There are about 300 billion euros in savings deposits with the Belgian bank,” he clarified yesterday in “The appointment”. “One and a half percent of that is 4.5 billion euros. On the other hand, the pot they receive from the ECB is 8.4 billion euros. Instead of distributing it to shareholders, they should give a fraction of it to savers .”