Credit Suisse Group AG : Credit Suisse Sets Negative Interest Rates on Cash Accounts
12/03/2012| 08:55am US/Eastern
By Neil MacLucas
ZURICH--Credit Suisse Group AG (CS) said Monday it will start applying negative credit rates on cash clearing accounts above a certain threshold, effective from Dec. 10.
"We invite our customers to keep cash balances as low as possible to avoid negative credit charges," Credit Suisse said in a statement sent via the Swift payments system to customers in the Swiss interbank market.
The news of the introduction of negative rates by Switzerland's second-largest bank sent the euro surging versus the Swiss franc. The euro traded up to CHF1.2090.
"Should we see unexpected and/or unadvised increases in cash balances, we reserve the right to apply implied market rates on cash balances," Credit Suisse said.
The imposition of negative rates by Credit Suisse on its franc deposit accounts is "an attempt to make it more expensive to hold francs," said David Kohl, currency strategist at Julius Baer in Frankfurt.
Write to Neil MacLucas at firstname.lastname@example.org