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Freshfields Corporate Cash Barometer

Germany’s companies sitting on record €688 billion in financial resources

Companies in Germany have a record amount of 688 billion euros parked in their bank accounts and in cash on hand, despite a negative interest rate burden of minus 0.11 percent (at the end of September 2021). Storing liquid assets with credit institutions costs them around 734 million euros a year, according to the Freshfields Corporate Cash Barometer. The real interest rate after inflation is currently (at the end of October 2021) at a record low of minus 4.64 per cent.


Figure 1 – growth of liquid assets January 2003 – September 2021
(Investable liquid assets in € billion, company, ∑ cash, sight, overnight and time deposit balances)


The Freshfields Corporate Cash Barometer is calculated by Barkow Consulting on behalf of Freshfields. It is based on data from the German Bundesbank as well as the European Central Bank (ECB) and refers to German companies’ liquid assets consisting of cash, sight deposits, and overnight and time deposits. The details of the Freshfields Corporate Cash Barometer published in November 2021 can be downloaded (in German) here.

Mountain of liquid assets growing faster since pandemic outbreak

The mountain of parked liquidity has grown even faster since the outbreak of the pandemic. While the annual increase before the outbreak of the pandemic was 3.1 percent (up to February 2020), the amount of financial resources grew by almost 16 per cent between March 2020 and March 2021 compared to the previous year. Since the outbreak of the pandemic, the total has increased by 126 billion euros to 688 billion euros.

Expensive reserves and record negative interest rates

The calculations show that parking this record amount with the banks is currently costing companies 734 million euros (annualised and at the end of September) in negative interest or custody fees. By comparison, at the height of the financial crisis in September 2008, companies were still earning 11.6 billion euros in interest on their liquid assets.

The calculations also reveal that, taking inflation into account, the real interest rate on the funds parked by companies at banks was minus 4.17 per cent at the end of September, and is as low as minus 4.64 per cent at the end of October, and thus at a record low.


Figure 2 – Real interest rates on corporate bank deposits January 2003 – September 2021
(in % p.a., deposit interest minus inflation, company, Ø sight, overnight and time deposit balances)


Companies well equipped for upcoming challenges

The results of the Freshfields Corporate Cash Barometer underline the ability of German companies to act, such as in terms of adapting their business models with regard to climate change and greater sustainability.