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The Impact of the ECB’s Low Interest Rate Policy on Companies – Results of a special question featured in the ifo Business Survey on negative interest on deposits

Author

Listed:
  • Christa Hainz
  • Artem Marjenko
  • Susanne Wildgruber

Abstract

As part of the ifo business survey in June, companies were surveyed on their experiences with negative interest rates. Evaluations of the special question show that one in five companies was confronted with negative interest rates on its deposits. Medium-sized and large companies were far more frequently affected than small companies. Most firms tried to avoid negative interest rates. The most common reactions in such cases are negotiating with the bank or switching to another bank that is not yet charging negative interest. Transfers between financial investments or corporate areas, as well as higher investment activity, were also frequently cited responses. The latter reaction is particularly interesting from an economic perspective, since it not only has a monetary impact, but also has implications for the real economy.

Suggested Citation

  • Christa Hainz & Artem Marjenko & Susanne Wildgruber, 2017. "The Impact of the ECB’s Low Interest Rate Policy on Companies – Results of a special question featured in the ifo Business Survey on negative interest on deposits," ifo Schnelldienst, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 70(15), pages 38-41, August.
    • Handle: RePEc:ces:ifosdt:v:70:y:2017:i:15:p:38-41
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    File URL: https://www.ifo.de/DocDL/sd-2017-15-hainz-etal-negativzinsen-2017-08-10.pdf
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    Citations

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    Cited by:

    1. Robert Lehmann & Felix Leiss & Simon Litsche & Stefan Sauer & Michael Weber & Annette Weichselberger & Klaus Wohlrabe, 2019. "Mit den ifo-Umfragen regionale Konjunktur verstehen," ifo Schnelldienst, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 72(09), pages 45-49, May.
    2. Stefan Sauer & Klaus Wohlrabe, 2020. "ifo Handbuch der Konjunkturumfragen," ifo Beiträge zur Wirtschaftsforschung, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, number 88.

    More about this item

    JEL classification:

    • D92 - Microeconomics - - Micro-Based Behavioral Economics - - - Intertemporal Firm Choice, Investment, Capacity, and Financing
    • E43 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Interest Rates: Determination, Term Structure, and Effects

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