In a report published by the ECB yesterday they noted that banks in the single currency area had been saving euro notes rather than parking deposits at the European Central Bank. In the 8 years to March 2016 they held on average €50 billion in notes; since then, paper notes held have increased by €21 billion to €76.8 billion, 70 per cent of this increase down to German lenders. Note that it was in June 2014 that the ECB’s key rate turned negative. Separately, yesterday Germany’s bank regulator Bafin announced that it was keeping an especially beady eye on Deutsche Bank’s regulatory and compliance departments. This is because they are worried about anti-money laundering and terrorist financing controls. So much so that for the first time ever they have appointed a ‘special representative’ to this particular task at this specific bank.
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