Bundesbank concerned about negative interest rates for savers

The German central bank Bundesbank is worried that private savers may soon face negative interest rates on their bank accounts, board member Andreas Dombret warned in a interview Wednesday.

"The banks and savings banks I speak to want to do everything to avoid that," Dombret told Der Spiegel news magazine.

"But the longer the current interest rate environment lasts, the higher the possibility that they might pass on the negative rates" to customers, Dombret said.

"As the supervisory authority, we don't tell the banks what to do. Every bank and savings bank must decide for itself."

In a bid to push up chronically low inflation in the euro area, the European Central Bank slashed its main refi refinancing rate down to zero this month and lowered its deposit rate to minus 0.40 percent.

The Bundesbank has made no secret of its opposition to the ECB's decision to bring its key rates down so low for such a long period.

Bundesbank president Jens Weidmann said he was not convinced by the ECB's latest policy moves.

With low interest rates offering little incentive to savers and weighing on banks' profitability, board member Dombret noted that "lots of banks have increased their fees to customers or are thinking about increasing them."