Pa Daly (Kerry, Sinn Fein)
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142. To ask the Minister for Finance his views on the charging of negative interest rates on accounts used to hold funds for probate or conveyancing proceedings; and if he will make a statement on the matter. [16746/21]

Paschal Donohoe (Dublin Central, Fine Gael)
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The application of interest rate charges is solely a commercial matter for the board and management of each bank. I have no role in the day to day operations of any bank operating within the State including banks in which the State has a shareholding. Decisions in relation to commercial matters are the sole responsibility of the board and management of the banks, which must be run on an independent and commercial basis.

Deposit balances and liquidity in general has risen significantly across the banking system in Europe in recent years as the ECB has continued to provide additional funds through their asset purchase schemes and long term refinancing operations. This has been further exacerbated by the COVID-19 pandemic as households continue to stay at home and save and businesses defer investment decisions.

This excess liquidity which has grown significantly in the European system and in the main it gets placed back on deposit with the ECB who charge the banks -0.50%. The application of negative deposit rates by the ECB has resulted in European banks incurring a consequent cost on deposit accounts. The Irish banks are impacted in a similar way to their European counterparts. The banks across Europe have looked to pass some of the costs associated with negative rates to deposit holders with larger balances. The Irish banks are no different in this regard.

In passing on some of these costs, banks have decided that they cannot differentiate between customers in different sectors and for that reason, banks have chosen to apply charges based on the size of the deposit balance.

I am not in a position to comment on the potential impact on accounts used to hold funds for probate and conveyancing proceedings. However, I understand that some legal practices have already taken steps to work closely with clients to ensure that clients' monies for transactions spends the least amount of time possible in the client account.