Deutsche Bank chief criticizes ECB charge on lenders

By John O'Donnell

FRANKFURT (Reuters) - Money printing may have run out of power to help the economy, the head of Deutsche Bank said on Wednesday, arguing that central bank strategy was backfiring by hurting banks and making lending more expensive.

John Cryan's comments, delivered to an audience that included one of the European Central Bank's most influential policy-setters, highlight the pain being felt by banks from zero interest rates designed to buoy the economy.

"I think monetary policy needs to go the other way," Cryan said. "A more normalized interest rate environment, I think, is a safer place."

Cryan, whose group was recently sucked into a bank stocks crash, was particularly critical of central banks' charges for hoarding money with them - known as a negative deposit rate.

The ECB has imposed such a charge and could increase it by making the deposit rate more negative when governors meet next week. Cryan's appeal, alongside the concerns of other bank chiefs, are likely to be taken into account.

"The biggest fear in the markets is that the main instrument that has been used by central banks to try to generate economic growth ... has no more strength in it," he said.

"One of the big risk factors over our bank is the threat of interest rates becoming more negative. This means charging more for credit. Banks cannot ... absorb the loss."

(Reporting By John O'Donnell; Editing by Gareth Jones)

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