Will not affect individual/corporate customers.
By Raif Karerat
WASHINGTON, DC: Europe’s largest bank HSBC is slated to join a slew of U.S. and European lenders in charging other banks for depositing money in the currencies of countries that have negative interest rates.
The new protocol will affect deposits from banks in Euros, Swiss Francs, Danish crowns and Swedish crowns, the international news agency reported.
HSBC made the decision in response to a bond-buying program that has depressed interest rates across Europe. The Eurozone’s central bank is aiming to buy €60 billion’s worth of public and private sector debt a month, reported The Telegraph, which equates to $66.6 billion in U.S. currency.
“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 announced the changes will not affect the deposits of individual or corporate customers.
A day after HSBC made their announcement, California Treasurer John Chiang told the bank it can no longer participate in a state deposit program because his office is concerned about allegations that the parent company has been involved in money laundering, sanctions violations and tax evasion, according to the Wall Street Journal.
“We are committed to the highest ethical standards, and will not partner with any firm that has and may continue to wantonly disregard the rule of law,” Chiang wrote in a letter to the bank.
The bank is currently facing probes in the U.S. and France over allegations it facilitated tax evasion. The bank previously settled with the U.S. government after admitting it failed to catch dirty money moving through its infrastructure and that it violated U.S. sanctions in doing so.