Europe’s top insurers are selling protection to German banks that hoard billions of euros of cash in vaults to avoid paying a penalty by parking it at the European Central Bank, company executives told Reuters.

The sums are so big they are also setting up consortia to insure cash storage spaces, responding to banks’ growing desire to escape the negative deposit rate introduced by the ECB to encourage banks to lend money, executives said.

Allianz, the region’s largest insurer, and Ergo , Germany’s second biggest player, told Reuters they are seeing an upsurge in enquiries for cash insurance by German banks. Germany’s Talanx and France’s Axa said they offer similar policies.

On large amounts, these can cost less than half the price of keeping the money at the ECB and executives said banks and insurers are striking deals to underwrite holdings of 2 billion ($2.3 billion) to 4 billion euros.

“In recent months, we’ve seen an increased interest from financial institutions such as banks for higher limits for cash coverage in secure facilities,” said Philip Beblo of Allianz Global Corporate & Specialty in Munich.

Storing cash is particularly popular in Germany, where Finance Minister Wolfgang Schaeuble and banks have been critical of the ECB. The executives said they were not aware of similar requests for cash protection so far from banks from other European countries and Switzerland, where the central bank has also set negative interest rates, has not seen such a trend.

Last week, two officials told Reuters that Germany’s second-biggest lender, Commerzbank, was mulling holding billions of euros in vaults.

The ECB introduced the penalty charge to encourage banks to lend their money to help stimulate the economy rather than parking it at the central bank.

But with economic prospects dim, banks are either unwilling to take the risk of lending or companies and consumers are reluctant to borrow. Compounding this problem, there is ever more cash in circulation, due to ECB money printing.

The extra cash has flowed towards the core of the euro zone and Germany, leading to a glut of liquidity.

Cheaper Costs

Compared to the more common electronic transfer of money, storing and moving billions of euros of banknotes presents a logistical challenge because banknotes are heavy to move in large quantities.

Two billion euros in 200 euro notes, for example, weighs roughly 11 tonnes.

The cash may also be stolen or catch fire, two of the chief risks that insurers protect banks against.

The steep penalty from central banks, however, makes keeping physical cash a more attractive alternative.

The negative deposit rate of 0.4 percent translates into a charge of 4 euros a year on each 1,000 deposit at the central bank, making it expensive for German banks which have access to large amounts of cash.

A second insurance industry executive, who asked not to be named, said that the cost of storing and insuring the cash against catching fire or theft could be as little as half that amount.

He calculated that the cost of security as well as insuring against loss of the cash would amount to between 0.2 and 0.25 percentage points less than the ECB’s penalty rate.

The risk of insuring large amounts of cash is typically distributed so that no single insurer is on the hook for the whole amount.

The lead insurer arranging a deal with a bank may have four to six co-insurers to cover 1 billion euros. That panel could expand to 10 or more for larger amounts, with insurers typically seeking to limit individual exposure to $300-$400 million.

($1 = 0.8856 euros) (Additional reporting by Carolyn Cohn in London and John Revill in Zurich.)