Violations of the German Competition Act (GWB) by the European Central Bank (ECB)

By Koen Jacobs for Op V

Today I sent the following complaint to the German Federal Cartel Office (Bundeskartellamt). The complaint was also forwarded to the EU, the German government – because the ECB is registered in Germany – and to the Belgian government because the EU is headquartered in Brussels.

Dozens of news agencies have received a copy as well.

Please download the complaint (pdf file) here and send it to your government officials, especially when you live in a EU member state: Austria, Belgium, Bulgaria, Croatia, Cyprus, Czechia, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain or Sweden.

Send it in your name and/or in name of your organization or company.


Violations of the German Competition Act (GWB) by the European Central Bank (ECB)

Document created and forwarded to the Bundeskartellamt on September 25, 2020


On September 24, 2020 [1] Deutsche Wirtschafts Nachrichten, a Bonnier Group publication, confirmed that the ECB “supplies banks with fresh money – at negative interest rates.”

Further stating that “a negative interest rate is used as a basis for the loans totaling 174.5 billion euros. In other words, banks get a 0.5 to 1 percent premium for accepting the money from the ECB.

We contend that this is a violation of the German Competition Act (GWB); that the European Central Bank, or ECB, deliberately abuses its dominant position in the banking sector; that this is not an incidental violation; that the ECB promoted this negative interest rate; that the offer of negative interest rates is not justifiable using objective reasons.

The ECB is registered at Sonnemannstrasse 20, 60314 Frankfurt am Main, Germany. This is under the jurisdiction of the German Bundeskartellamt (or German Federal Cartel Office).

The Bundeskartellamt

The Bundeskartellamt [2] is an independent competition authority whose task is to protect competition in Germany. The protection of competition is a key regulatory policy objective in a market economy. The main task of the Bundeskartellamt is to apply and enforce the GWB.

The Violations by the ECB

Banks in general, also in Germany, have the power to create money, funds and credit – or account balance. The system known as fractional reserve banking enables and allows banks to create this account balance without there having to be actual physical bank notes or coins in the possession of the banks, that guarantee the value of all the created balance.

“Fractional reserve banking is a system in which only a fraction of bank deposits are backed by actual cash on hand and available for withdrawal.” – Investopedia [4]

“Because banks are only required to keep a fraction of their deposits in reserve and may loan out the rest, banks are able to create money. To understand this, imagine that you deposit $100 at your bank. The bank is required to keep $10 as reserves but may lend out $90 to another individual or business. This loan is new money; the bank created it when it issued the loan. In fact, the vast majority of money in the economy today comes from these loans created by banks. Likewise when a loan is repaid, that money disappears from the economy until the bank issues another loan.” – Lumen Learning [5]

As such, the ECB can create money and account balance and offer loans nearly at will and nearly unlimited since it is backed by the treasuries of its member states. This power given to private banks, on the other hand, is supposed to be limited and depends on their rating and other factors such as actual assets.

By selling money at negative interest rates, which in this case is a physical product – euros – that is part of registered contracts between the ECB and private banks, the ECB violates the German GWB because private banks can not use the same mechanism of negative interest rates while at the same time still offering their clients the monetary benefits that private banks currently get from the ECB.

When private banks borrow money from the ECB they are in the current circumstances receiving additional cash money from the ECB. For every 1 billion euro that private banks borrow they receive up to 10 million euro in monetary incentives from the ECB. Just for accepting the ECB’s money.

If private banks would apply the same mechanism, negative interest rates, their clients would also receive similar monetary incentives. Effectively turning private banks into institutions that can then be considered similar to social welfare institutions created and operated by governments.

Not only are the ECB’s negative interest rates a form of unfair competition, this system also devalues the euro as a currency.

Given the alleged expertise that is present at the ECB, its alleged experts know very well the ramifications of negative interest rates. The financial markets and independent experts have continuously objected to the ECB’s negative interest rates, yet the ECB does not take into account the grievances of the markets, the independent experts, the citizens of and companies in the EU member states.

The ECB provably and intentionally devalues the labor, the assets and the livelihoods of all the citizens of the EU member states and the companies that are registered in the EU.

As an example to further prove the ECB’s violations and the unfair competition we refer to today’s loans offered by Deutsche Bank [3].

Currently, Deutsche Bank states “a loan rate so small that we have to capitalize it,” as part of one of its credit products that charges clients a 1.93% to 1.95% annual interest rate. So, without any monetary incentives for Deutsche Bank clients. On the contrary.

“To capitalize is to record a cost or expense on the balance sheet for the purposes of delaying full recognition of the expense.” – Investopedia

This supposedly means that Deutsche Bank is of the opinion that they will have to pay the costs of such a loan without actually making (direct) profits on such a loan contract.

On the other hand, if Deutsche Bank would apply the ECB’s negative interest rate mechanism for its own clients then Deutsche Bank would highly likely be forced to borrow additional money because such a mechanism would go directly against the private bank’s purpose, which is – in this example – to make profits by providing loans to its clients, and its obligations.

Private banks can not offer negative interest rates because that is not why they were created. Private banks are not created to be social welfare gateways. On the contrary. Private banks are created to create and maintain positive balance sheets, not negative balance sheets.

Additionally, by continuing this mechanism of negative interest rates the ECB further undermines private banks their ability to efficiently compete and to maintain in business altogether.

For instance, BlackRock, dubbed “the largest shadow bank in the world”, continues to increase its market share, also (but not exclusively) by relying on the negative interest rates by the ECB that force private banks to either give up market share, merge or go out of business. It appears that there is a certain form of intended collusion between the ECB and BlackRock in favor of BlackRock and perhaps also the ECB. When is one supposed to rightfully speak of a “cartel” under such circumstances?

This violation by the ECB is not incidental. The ECB has been using this negative interest rates mechanism for an extended period of time and does not indicate that it will abandon this any time soon.

By announcing weeks and months in advance that the ECB will maintain these negative interest rates it promoted this mechanism in advance, to lure private banks into fresh loans.

In conclusion, the ECB’s negative interest rates as described by Deutsche Wirtschafts Nachrichten on September 24, 2020 are not justifiable using objective reasons.

The reasons given by the ECB do not outweigh the devaluation of the euro, people’s labor, people’s livelihoods and people and companies their assets. Nor are financial markets and independent experts in any way agreeing with the ECB’s negative interest rates.

A bank is a bank. How it is incorporated does not matter when it concerns the law of the land. The law is the law and it applies the same to everyone and everything. If not, then the law is of no use – if not purely anecdotal.

We also want to remind you of the fact that the European Union and, thus, the ECB were established through completely undemocratic means that have effectively taken away the power to govern from the citizens of EU member states, power that must be vested in the citizens of the EU member states at all time, but which is not.

Not a single citizen of any EU member state has ever had the chance to vote in any binding referendum for or against the establishment of the EU and the ECB.

We urge you to investigate these matters immediately and provide us and the international community with your findings and ruling after having taken into serious consideration all of the positions that we have taken in and through this document.


Koen Jacobs
Citizen of Belgium
Author of this document, “Violations of the German Competition Act (GWB) by the European Central Bank (ECB)”, dated September 25, 2020.


1.EZB versorgt Banken mit neuem Geldregen zu negativen Zinsen:
2.The Bundeskartellamt:
3.Deutsch Bank private credit:
4.Fractional Reserve Banking:
5.Creating Money: