Wednesday, November 13, 2013

Why does the exit from the crisis will take longer than expected ?

Why does the exit from the crisis will take longer than expected ?

Negative interest rates - when you get charged for depositing money at the bank.

Negative interest rates are a sign of the financial system not working normally.

Banks are holding about $700 billion in excess reserves at the FED.

The consequence of a negative interest rate regime pursued by central banks is to shift the pain of deflation from banks to depositors, from debtors to creditors.

 INTEREST rates are very low around the developed world; near-zero in nominal terms and negative in real terms.

Negative real interest rates are the product of aggressive monetary policy by a central bank and have a profound impact on the movement of capital within an economy

The problem with negative interest rates, however, is quickly apparent: nobody would lend on those terms.

The shrinking universe of safe-haven assets is forcing investors to pay negative rates to park cash in guaranteed custody accounts.

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