Coin disrepute as a role model: This is how our monetary system could be renewed!

Coin disrepute as a role model: This is how our monetary system could be renewed!

The current discussion about investments and interest rates focuses on both historical and legal aspects. Klaus Willemsen's “Gastwirtschaft” column highlights the importance of coin disrepute in the Middle Ages. This economic intervention proved revolutionary and had a positive effect on the economy, leading to a vibrant market economy. Willemsen explains that in the High Middle Ages, money lost value when it was hoarded. Introducing a small fee on holding cash or credit kept the money moving.

An essential part of the coin's disrepute was the obligation to exchange old coins for new ones. This led to active circulation of money, which favored thriving cities and reliable markets. This prevented systematic indebtedness through interest and compound interest. Willemsen suggests establishing a modern equivalent to coin disrepute, namely the introduction of a money hoarding fee (negative interest rate). The aim would be to promote the circulation of money and thereby avoid interest-related growth in deposits and overall debt.

Negative interest rates and their legal framework

In a recent decision, the Federal Court of Justice (BGH) made it clear that negative interest rates on savings and daily money accounts are inadmissible. These practices were levied by banks and savings banks when balances rose above a certain amount. The background to this practice was the low interest rate policy of the European Central Bank (ECB), which imposed costs on banks for safe investments. Consumer advice centers have filed lawsuits against these surveys and have achieved some quite successful results.

The BGH emphasizes that negative interest rates on daily money and savings accounts contradict the purpose of saving. In contrast, negative interest rates on current accounts are generally permitted because the focus here is on the availability of money. However, the relevant contractual clauses must be clear and understandable, which the BGH has assessed as inadequate in some cases.

Repayment claims and advice offers

The BGH's decision means that repayment claims can be asserted for negative interest paid wrongly - important information for affected customers. Claims from 2022 are not time-barred until the end of 2025, while older claims may also be able to be asserted if measures to prevent the statute of limitations have been taken. Consumer advice centers offer advice to affected customers and help them to gain clarity about their claims.

Overall, it appears that both historical and current monetary policy measures have far-reaching effects on the economy and consumer rights. Willemsen's proposals and the BGH's legal decisions provide starting points for a comprehensive discussion about the future of money in Germany and the responsibility of banks towards their customers.

The healthy monetary order, as Willemsen describes it, could possibly be achieved by avoiding interest-related growth in deposits and reducing income inequality. This is in contrast to the current challenges of the low interest rate phase, which presents both opportunities and risks.

fr.de and tagesschau.de report on it in detail.