Low interest rates boost bank deposits

Analysis - July 2018 - No. 9

Authors Hensch, Jonas Ladegaard; Pedersen, Erik Haller
Subject Monetary- and foreign-exchange; Other economic analyses; Cash outstanding
Type Analysis
Year 2018
Published 2 July 2018
Citizens' bank deposits have increased substantially since 2011, currently accounting for 60 per cent of GDP. This is a natural development in view of the growth of the Danish economy and the narrower spread between bond yields and bank deposit rates. This means that citizens suffer a small interest rate loss only by holding deposits with banks at low or zero interest rates rather than holding bonds.