Wednesday, 30 August 2023, 17:34
The refusal of banks to pass on the rise in interest rates to their customers' savings has caused the flight of more than 60 billion euros in deposits in the last year. In Spain, residents have withdrawn 63.6 billion euros since July 2022 when the European Central Bank (ECB) moved to tackle inflation. Its actions have taken the reference rates, the body's main weapon in the fight against rising prices, from 0% to 4.25% in less than twelve months.
According to Bank of Spain statistics, residents' deposits (individual savers, businesses, insurance and pension funds, among others) stood at 1.569 trillion euros this July, compared with 1.633 trillion euros just before the start of the rate hikes. If the amount accumulated by those abroad is added to this figure, the drain suffered by the banks amounts to almost 70 billion euros.
Individual savers and businesses are the groups that have suffered most from the banks' tardiness in raising interest rates on their deposits. But the financial institutions have not been slow to increase the rate on consumer and mortgage loans.
Individual savers withdrew a gigantic 5.5 billion euros in the month of July from a pot of 984.8 billion euros; the total amount withdrawn by this group over the full 12-month period was 10.1 billion.
A popular alternative is proving to be the Treasury's fixed income Letras del Tesoro bills, which exist only in book-entry form. They offer returns of more than 3.5% on 12-month maturities, compared with the 2.2% average for bank deposits.
Individuals now hold 14.947 billion euros in this type of debt, surpassing for the first time the banks themselves, which at the end of May had 13.720 billion euros in Letras del Tesoro bills, according to the latest public data from the Treasury.
Businesses have also withdrawn 18.8 billion euros from their banks over the last year, with 7.7 billion euros being withdrawn this July.
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