For Volker Wieland negative interest rates are still a temporary phenomenon (SWR)

Prior to the next board meeting of the European Central Bank's (ECB) Governing Council, Prof. Volker Wieland is expecting a further cut in the deposit rate. Long-term negative interest rates for government bonds are extraordinary, he said in an interview with the German radio station SWR. In Wieland's opinion, however, this does not entail zero interest rates for the next ten years.

According to Wieland, bank customers do not necessarily have to assume an increase in fees on bank deposits. It is not easy for banks to pass on negative interest rates to customers. "Negative interest rates would frighten off customers".

In his opinion, the phase with negative interest rates will last for quite some time. "However, some day interest rates will rise again". Due to the weak economic development in the euro area in the year 2014 and 2015, an expansionary monetary policy was appropriate. As Wieland pointed out, the measures to stimulate economic development had been excessive. Especially in the past two years, the ECB could already have stopped bond purchases and started raising interest rates in a prudent way. Fundamentally, an expansionary monetary policy had been adequate, Wieland argued. "It is a question of the right dosage though".

 

SWR2 - Geld, Markt, Meinung: "Minusgeschäft Sparen: Jetzt drohen jedem Negativzinsen"
(Loss-making venture: negative interest rates are looming for everyone)
(Interview with Volker Wieland in German: 05:40 min. - 11:45 min.)