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Berg has previously spelled out all the ways in which negative interest rates are hurting the financial industry (with smaller loan losses marking a rare bright spot). Before negative rates, banks operated in a world in which deposit funding was cheaper than market funding. That world basically no longer exists.

Earlier this month, Jyske Bank became the first in Denmark to announce it will start charging its wealthiest retail depositors, or those holding more than 7.5 million kroner US($1.1 million). But the country’s biggest lender, Danske Bank, has said it won’t do the same.

In the “surreal” world in which interest rates are below zero, as Berg puts it, the people running Europe’s banks need to come up with new ways to make money. That’s especially true if retail clients react to negative deposit rates by withdrawing their cash.

“There are financial stability threats for any significant transition in terms of how the structure of the system looks,” he said by phone. It’s “similar to what applies to any other industry. The textile industry also had to restructure itself at some stage.”

“If you continue to stay in this environment, something needs to give,” Berg said. “So it’s a conditional forecast that can be influenced in a benign way by management actions.”

If you continue to stay in this environment, something needs to give Jesper Berg, director general of the Financial Supervisory Authority

The Danish bankers’ association wants the central bank to look into easing the burden of negative rates on the financial industry by expanding a deposit facility that lets lenders park excess reserves at zero per cent. Berg says he won’t join the debate because only the central bank can make that call.