Kim Fournais (CEO and founder of Saxo Bank)|In the labyrinthine world of banking and investment, where opacity tends to masquerade as tradition, few are aware that, amid the ebb and flow of financial markets, a significant number of banks and intermediaries choose to retain the benefits of central bank rate hikes, rather than pass them on to their clients.
This is reflected in banks’ quarterly results, where some even seem surprised by the profits reported, most of them as a direct result of central bank decision making. This is what has led the British financial regulator to ask financial institutions to improve the deposit rates offered to consumers.
And the system of play appears to be the same across the euro area, where the average bank rate on instant access deposit accounts for households is just 0.31% annualised. All this at a time when the official deposit rate of the European Central Bank (ECB) stands at 4.50%.
