NEGATIVE INTEREST RATES


NEGATIVE INTEREST RATES

With countries like Japan, Denmark & Switzerland currently in negative interest rate territory could the UK and USA follow suit? Having negative interest rates theoretically means that the Banks and Lenders would pay you to borrow money instead of you paying them. In return if you’re a saver you will pay a fee for the Bank to hold your deposits rather than receiving interest.

As Crazy as it sounds there is method to the madness. Central Banks can take this stance as a stimulus to get the economy moving during times of deflation where consumers would rather hoard their money than spend or lend. It will encourage people to borrow cheap money, and those with capital to take more risk in hope of getting a better rate of return.

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