More Signs of Cash Leaving Germany After ECB Negative Rates: Bloomberg

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Further evidence emerged Monday that ECB rules designed to alleviate the drag of negative rates on bank profitability are pushing deposits out of Germany into more cash-strapped areas.

Data for the end of October shows the Bundesbank’s Target2 balance dropped by 78 billion euros ($86 billion) while that of Italy rose 48 billion euros and France’s grew by 19 billion euros. The implication is that tiering is prompting German lenders to park their deposits at under-allocated banks in Italy and France.

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