HSBC is to start charging other banks for depositing money in currencies of countries that have negative interest rates.
Europe’s biggest bank will join a number of other US and European lenders to charge their peers for holding deposits – effectively passing on the cost of holding money where interest rates have turned negative.
The move will affect deposits from banks in euros, Swiss francs, Danish crowns and Swedish crowns.
The European Central Bank’s bond-buying programme has depressed interest rates across Europe. The eurozone’s central bank is aiming to buy €60bn-worth of public and private sector debt a month.
“HSBC charges banks for deposits they hold with us in currencies where negative interest rates apply. Banks affected have been notified and we continue to monitor the situation,” HSBC said. It will start applying the charges in August.
The bank declined to say how much it had in deposits in the affected currencies. It will not affect the deposits of individual or corporate customers.