Such policies are unpopular with clients who are used to earning interest on their deposits, not paying fees. Now, some are weighing more radical ways to protect their money.
“A lot of people [are] thinking about what they should do, and alternatives to this,” said Adriel Jost, head of economics at Wellershoff & Partners, a consultancy based in Zurich.
‘It’s your money’
Norman Villamin, chief investment officer for private banking at Switzerland’s UBP, said a limited number of clients have moved their cash into private storage. Some may have sold their business or a home recently, and “can’t deploy the cash all in one go,” he explained.
Similar requests have been received by bankers at the Swiss private bank Rahn+Bodmer Co., according to partner Martin Bidermann.
“We tell the client, watch out — it’s your money,” Bidermann said. Some have still moved ahead, he added.
Banks in Switzerland generally see charging customers to hold their cash as a measure of last resort.
“The bank will discuss with the client, if you do these other things with us that allow us to make some money, we won’t charge you,” Villamin said. “I do think the banks are going out of their way to try and find a way not to charge the large cash holders.”
Bidermann said he was aware of similar discussions with clients.
Still, some banks have been forced to levy charges on their biggest account holders after years of extraordinary monetary policy.
Negative interest rates, launched in Switzerland in 2015, have made it harder for the country’s banks to generate profit on loans and mortgages. Payments on excess reserves that need to be stored with the central bank have also caused pain.
Both banks declined to comment on whether they’d received requests from high net worth clients to take out cash.
No easy feat
Even if clients do want to withdraw large sums of cash, the logistics aren’t easy. First, a customer would need to come up with a storage and insurance plan.
Ludwig Karl, a spokesperson for Swiss Gold Safe, which rents safe deposit boxes in Switzerland and Lichtenstein, said that the company has seen increased interest in cash storage since 2015. But getting large amounts of Swiss francs out of a bank can be difficult, he observed.
Bidermann noted that once a client withdraws a significant amount of cash, they could struggle to deposit it again down the line. “Any bank would have questions” if a client arrived with 800,000 Swiss francs in cash five or 10 years from now, he said.
Notably, the number of 1,000 Swiss franc notes in use has risen faster than any other denomination.
Before taking the reins in November, Lagarde said that European citizens would be “worse off” without negative interest rates, but promised to monitor their “adverse side effects” as ECB president.