Europeans drain billions from banks, fed up with shrinking savings

The biggest rip-off in American banking is that narrow banking is effectively illegal (not the banks' fault), but HYSAs are starting to get around that.

Doesn't seem ideal while simultaneously repeatedly begging the same rare US nationals with Swedish residence permits to move to work their mainframes, but who am I to judge.

See https://www.wired.co.uk/article/revolut-trade-unions-labour-...

The fee banks that do pass it on will only do so for newly deposited money.

There is literally no bank in my country that doesn't charge fat fees. Even credit unions want at least like 8€/month for just a starter account with online banking, plus the 1.5€ fee for each SEPA transfer, seriously. Back when I learned that this isn't standard procedure worldwide my mind was completely blown.

As for alternatives, there are pseudo-banks one might use like N26, Revolut, Wise and similar, but each one of those can at any point terminate your account for no reason, some don't even allow receiving money from accounts not in your name so you can't use them as actual bank accounts. They're not exactly a thing one can keep savings in.

But generally speaking, my European friends all have an animosity towards banks I have not seen in other countries.

So then where are the sellers putting their cash? This is a closed system.

For sure there is a slowdown and some markets are dropping (Sweden, Luxembourg).

They aren't. In my Euro area the highest interests on savings accounts I can find at banks is 2,5% and that's as a special offer for new customers.

We in Europe are being fleeced from all sides, while banks, energy, real estate, food companies are having their most profitable quarters ever. Something's gotta change.

Highly liquid money market ETFs[0] are paying ~5%, that's hard to beat with minimal risk. Individual equities are..not doing so well.

[0] https://www.purposeinvest.com/funds/purpose-high-interest-sa...

this is more of a lazyman tax than anything else

there are instant access savings accounts offering 3.5%

and if you lock it up for a year you can get 5%

Stock dividend of 5-10% is pretty much unheard of here.

For instance, Albemarle has a revenue jump of 119% YOY% with a 33% Profit margin. but it's trading four time book value. That's insane to me. It has tech company growth, but since the price of lith is at all time lows investors are scared. Even with lith at this price, they are making a huge margin and are scaling up production. But if you beleive Lith will be in short supply in the future, it's a great opportunity.

When they started QE, the effectiveness was heavily limited by the small size of the securities market relative to the broader banking sector (this is why they did TRLTOs and things you didn't see elsewhere). So international borrowers started issuing in EUR realising that the ECB would buy their debt, and this has only accelerated now that US rates are rising (it has also led to massive growth in private credit and other extremely inadvisable products).

The problem with this is that it isn't possible for the EU to suddenly have US-style, open financial markets where savers get paid a fair amount. It undermines the system of pensions, undermines the heavy corporatism, it undermines the whole economic model of most of Europe (even countries like Italy that have larger financial markets, it is largely due to the needs of govt finance...their govt debt cannot be financed without extraction from domestic savers...this becomes impossible if they have options).

Yes it can, and that's the point of a money market fund. Money market funds invest in short-term debt securities. That's a mechanism for lending money.

Indian communities around me were getting hit hard by home invasions and robbery some years ago once it became known that they hold and trade large amounts of gold in their homes.

Money attracts thieves like food attracts bears. Store it somewhere away from yourself.

Besides, no safe is fireproof. At best they are fire-resistant. Good luck getting to your money while your house is burning (lol) or after it collapses.

Large banks are broadly fine for now (cough Credit Suisse cough), but there are a lot of small/midsize banks that are more vulnerable, enough to have some contagion effect. If more start failing, spooked depositors with more small/midsize banks start pulling their money out and move it to large banks - possibly collapsing more of the smaller ones.

And we haven't even started seeing bad commercial real estate loans hit banks. https://www.ft.com/content/da9f8230-2eb1-49c5-b63a-f1507936d...

The next one in line could be this https://twitter.com/elerianm/status/1654073420328452096

If we zoom out, we could say it's a fairly inevitable second order effect of the last ~15-20 years - large deficits, low rate environment and money printing. As debt builds up, the system becomes fragile over time, and events like pandemics or wars (supply shocks, huge fiscal/monetary pump) can surprise, with a sudden spike in inflation.

This has forced central banks to swiftly reverse course and hike rates much faster and comparatively higher (from 0% starting point) than in a long while.

Problem is, when economy participants are hooked to low rates over decades, these hikes will likely break things - starting with banks, then commercial real estate, then who knows what.

Central banks can only hope inflation comes down fast before the dominos start falling - but it's not guaranteed it will, or that it will stay low, especially if central banks are forced to intervene with more easing in the event of some kind of crisis.

The 1% and 2% examples are not from the article as one of the losing deposit examples, just my comparisons because I am familiar with them. So I wonder if they also report reduced deposits. (I am probably not even using the correct financial instrument to compare, it's just one easy to look up.)

So I wondered if consumers using the low interest banks (like Deutsche Bank with 0.4%) are mostly just switching to higher interest banks (like DKB with 1.0%) and the actual change to those 9.45 trillion euros is not in the tens of billions, as suggested by the article (e.g. Deutsche Bank with nearly 5% in change in deposits), but instead is closer to a few billions. In context of 9.45 trillion, that would be ~0.1%, which does not sound too worrying.

(those are vanilla rates offered to everyone, btw, nothing special)

Not to mention peoples money would smell like their beds. I prefer using safes for quick access things and deep unmarked holes for longer term storage. One of my methods is to pay extra for services so that I keep a credit on each account such as internet, power, etc... I also keep about 100 gallons of fuel with fuel stabilizer and SeaFoam.

I believe the logic is that if one has enough cash on-hand and their bank gets into trouble, they can still pay for food, fuel and other basic things to get by. It probably won't help for paying large bills like rent and mortgage unless people risk keeping a lot more cash on-hand. One can go into their brick and mortar bank to pay cash for their mortgage. It's good to do this periodically to pay extra towards the principal and shorten the loan duration.

Bitcoin accounts for <0.1% of global CO2e and has one of the highest shares of renewables in any industry (since it competes globally for the cheapest energy).

It incentivises renewables (by being a location agnostic buyer of first and last resort which buys all excess energy 24/7), reduces CO2e (by making it profitable to combust CH4 instead of venting it), stabilises energy grids (by providing flexible demand response, i.e. can be turned on and off at moment's notice), provides banking services for the global unbanked and financially discriminated, shields from gambling bankers and inflation of the money supply, ...

In comparison to all these use cases and benefits, mere "luxury" energy uses such as air-conditioning, tumble drying, video games, porn, ... all consume more energy and produce more CO2e (e.g. A/C ~100x more). Yet nobody calls to have the plug pulled on them.

Regulate the production of energy, not the consumption.

Sure thing buddy. One of the ways the "little guy" can push back against big banks and big government needs to have its plug pulled because of some imaginary 2 degrees panic. What the hell happened to "Hacker" in "Hacker News", this place is a cesspool of the mainstream rhetoric. Note: I have $0 invested in crypto, but I don't deny its usefulness in "keeping the bastards honest".

In crypto, they lost FTX. That seems to have been about it. No rule changes required. I can self-custody if I don't trust the exchanges.

For inflation proofing a fortune, sure, keep a large chunk in gold (or something else that is stable and movable). But for "emergencies" I'd try to keep some cash.

In the end though, they did get paid back all that they were owed. So all ended well.

I wonder if the same can be said about any of their former colonies though...

Needless to say, since then I've paid attention to how deposits are guaranteed for any accounts I open.

It's not actually the money...

1) Give the tools for any community to release their own coin

2) Communities pay the coin for participation or doing something (eg Hacker News karma). Maybe have a UBI to everyone so they can vote with their wallet. Upvotes are coin transfers etc.

3) Make the coin usable for local advertising or by local vendors. This is the WORK the community has to do (not us) same as VISA and Mastercard network had to do!!

4) Allow people to buy the local coin in a decentralized way. Now each coin becomes exchangeable all for other coins.

5) Intercoin network. Converts any coin to any other coin. Once your local farmer and electric company accepts YOUR city’s local coin, then you pay for food or your electricity bill, using hackernews coin, transparently.

Intercoin is to value what Internet is to communication. We are building an internet of value. It’s completely voluntary. If you don’t want to use it, don’t. If you want to shit on it, at least learn about it first.