Wrath of Draghi: savers hit with negative interest rates


#1

The Wrath of Draghi: First German Bank Hits Savers with ‘Negative Interest Rates’ - -> wolfstreet.com/2014/10/30/the-wr … rest-rate/

So what happens to banks when the purchasing power of the money keeps shrinking?


#2

This might shock the Germans into a rethink about the nature and utility of money, but I doubt it.


#3

Nah they will just save more. The German ‘we can all export our way to prosperity’ may hitthe buffers soon too, ushering in another round of expansionary austerity.


#4

They are paying for security - if they want yield they can put their money elsewhere


#5

#6

Last August https://news.goldcore.com/ie/gold-blog/deposits-bank-of-ireland/

Only larger customers will be affected by the charge for now. The bank claims that it has no plans to levy a negative interest rate on either personal or SME customers but negative interest rates seem likely as long as the ECB continues with zero percent and negative interest rates. Indeed, they are already being seen in Germany where retail clients are being charged 0.4% to hold their cash in certain banks such as Raiffeisenbank Gmund am Tegernsee.

The news came days after it emerged that FBD, one of Ireland’s largest insurance companies, have been moving cash out of Irish bank deposits and into bonds. Fiona Muldoon, the FBD CEO cited extremely low returns on deposits and bail-ins as the reason they were withdrawing cash from Irish banks and diversifying into corporate and sovereign bonds.


#7

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