Inquiry into interest on savings accounts

30th May 2006, Comments 0 comments

30 May 2006, BRUSSELS — Consumer Affairs Minister Freya Van den Bossche has urged the Council for Competition to investigate the interest rates paid on traditional savings accounts.

30 May 2006

BRUSSELS — Consumer Affairs Minister Freya Van den Bossche has urged the Council for Competition to investigate the interest rates paid on traditional savings accounts.

Finance Minister Didier Reynders also hopes to promote competition between the banks by regularly publishing a list of interest rates offered by both domestic and foreign banks.

The list will include interest rates paid on savings accounts and credit accounts such as mortgages.

The decision was taken after newspaper 'De Standaard' published a series of reports on Monday highlighting the relatively low interest rates paid on domestic savings accounts.

Minister Reynders hopes that by boosting competition, Belgian consumers will benefit more quickly from favourable interest rates.

The list of interest rates will be drawn up together with the National Bank of Belgium.
 
Economy Minister Marc Verwilghen will follow up the initiative from Minister Van den Bossche and request the Council for Competition to investigate the interest rates paid on savings accounts.

Verwilghen's spokesman said if it is revealed that the interest rates are below the market rate, questions must be raised as to whether correct market forces are at work.

In response, the financial sector federation Febelfin pointed to the tough competitive climate in which banks operate.

"The base interest, together with growth and conversion premium, is completely subjected to free competition between about 50 banks that offer savings accounts in our country," it said.
 
At the end of January, there was EUR 161.5 billion being held in domestic savings accounts. The four largest banks, Fortis, KBC, Dexia and ING Belgium account for 70 to 75 percent of that money.

But Belgian consumers are not profiting by current rising interest rates and are often worse off than savers in Belgium's neighbouring countries. Belgian banks pay 1.75 percent in interest, but foriegn banks are paying well in excess of 2 percent.

[Copyright Expatica News 2006]

Subject: Belgian news

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