SNB Negative Rate Applies to Just 3% of Cash Parked by Banks
(Bloomberg) — The Swiss National Bank said that just 3% of the cash banks are holding at the institution currently accrues a negative interest rate.
A total of 15 billion francs ($19 billion) is subject to a charge, the central bank said in an economic note on Wednesday that revealed the amount for the first time. That proportion is the same as it was before borrowing costs were cut last month.
While the SNB lowered its key rate to zero in June, lenders have to pay interest of 0.25% for deposits that exceed the threshold of 18 times their minimum reserve requirement. This is intended to incentivize banks to lend money to each other instead of parking it at the central bank.
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