* Banks may raise fees if faced with negative rates - Deutsche Bank co-CEO
* Cheap credit may lead to future crises - Commerzbank CEO
* Not all banks technically prepared to deal with negative rates - executive (Adds comments from bank executives)
By Thomas Atkins
FRANKFURT, Nov 22 (Reuters) - Radical moves by the European Central Bank to spur euro zone lending through low or even negative interest rates would not be effective and may sow the seeds of future crises, German banking leaders warned on Friday.
Deutsche Bank co-CEO Juergen Fitschen said banks will make lending decisions based primarily on the creditworthiness of the borrower, not due to pressure from the central bank to lend.
ECB President Mario Draghi said after the central bank’s last policy-setting meeting on Nov. 7 that it was “technically ready” for negative rates, if the economy warranted them.
Although Draghi has since downplayed the possibility that negative deposit rates were imminent, European banks have expressed concerns in public and in private that they could lead to market stresses.
“You don’t lend because the central bank wants you to put your money there and is threatening to charge you for the money you leave with them. That would be grotesque. We’d create another crisis,” Germany’s top banker, Fitschen, said.
Martin Blessing, chief executive of No. 2 German bank Commerzbank, warned that too much cheap credit could lead to future crises.
The ECB cut its main refinancing rate to a record-low 0.25 percent on Nov. 7 and kept the deposit rate at zero.
“One of the reasons why we are sitting here in the financial crisis was asset price inflation in the U.S. fuelled by too much cheap liquidity,” Blessing said.
“I don’t know how too much cheap liquidity can solve a problem that was created by too much cheap liquidity,” he said. “I just don’t get it.”
Technically, many banks remain largely unprepared for the possibility that the ECB may impose negative deposit rates, other senior bankers said.
”A lot of banks are not currently able to calculate it because the systems are not designed for it, said Hans-Dieter Brenner, the head of Helaba, one of Germany’s five state-backed Landesbanks.
“The systems would have to be changed pretty comprehensively and in the end, almost every part of the bank would be affected. The costs for that would certainly run into the millions.”
Standard banking technology platforms were not built to deal with negative rates, said one banker at a top 10 bank in Germany, who could not be named because he was not authorized to speak to the press.
“If the ECB were to introduce negative deposit rates, we would have to implement it with great effort; it’s not possible with the push of a button,” he said.
Otherwise, negative rates would not necessarily weigh on bank profits, Fitschen said.
If negative deposit rates make it difficult for banks to earn money on the so-called net interest margin, the difference in the rate at which banks borrow and lend, then they will seek revenues by charging customers differently, Fitschen said.
“If you can’t make money from the current account you have to change the way you charge for the services. We move more into commission-based services,” he said. (Reporting By Thomas Atkins, Arno Schuetze and Jonathan Gould; Editing by Hugh Lawson)