Retail customers are strongly averse to negative nominal rates, even if negative real rates are generally accepted. Because the cost of holding cash is relatively low when amounts are not too large, withdrawing part of their negative-yielding deposits could even be a rational reaction for many households. In the euro area, household deposits account for one fifth of banks’ liabilities on average.
Thus, a large withdrawal of retail deposits could be very problematic for banks, as they could become underfunded and more dependent on less stable financing.