Weeks of political pressure on banks to increase savings accounts' interest rates have culminated in an in-depth investigation being launched into several banking services.
Following weeks of reluctance, Belfius was the first major Belgian bank to announce on Wednesday that it would "generously" raise the interest on its savings accounts from 1 July. Later in the day, Keytrade Bank also announced an increase in the rates for its savings accounts from 12 June.
However, banks still receive much more interest for parking their money at the European Central Bank (ECB), while also receiving higher interest income from more expensive mortgage loans. This behaviour, which has been criticised by consumers, politicians and consumer rights groups alike, will now be the main focus of an investigation into the sector.
Solutions are needed
Minister of Economy and Employment Pierre-Yves Dermagne announced on Friday that he has asked the Belgian Competition Authority to launch an in-depth investigation into the sector's services with a view to providing better banking services at competitive prices and better interest rates. A proposal for an action plan is expected by the end of October at the latest.
"The low-interest rates on savings accounts show that banks are not fully aware of their social role. Additional measures need to be taken. I have asked the Competition Authority to come up with solutions," Dermagne said.
Consumer rights organisation Test Achats has repeatedly called for higher interest rates, stressing that banks are placing a "huge amount of money" with the ECB with an interest rate of 3.25%.
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"This represents an annual profit of €8.4 billion. While a 1% increase in the savings rate will cost them €3 billion a year. So yes, the banks do have room to raise interest rates," said spokesperson for Test Achats Laura Clays.
Dermagne stressed that launching this investigation "in no way relieves the government of its duty to see what it can do today," adding that his socialist party PS is also advocating for measures to reduce mortgage loan administration fees and electronic payment fees. "This is perfectly possible within the existing legal framework."
