New answers tagged

1

I am by no means a financial expert, I do however believe such a system would collapse totally. I cannot prove it though. Some figures: American population: 350 million Average american saving account: <10'000$ https://www.cnbc.com/2019/03/11/how-much-money-americans-have-in-their-savings-accounts-at-every-age.html That would give a possible total loan ...


1

Since this is a question about central banks... they would not want to do this because it would push many ordinary people to put their savings in highly speculative assets, potentially destabilizing the economy. It is/was already a bit of a concern even with near zero, never mind mildly negative interest rates. There's a fine line between "kickstarting the ...


-2

France, under the leadership of Emanuel Macron, has been trying to lessen it’s dependence on tourism as a main national income, and has been trying to strengthen it’s chemical industry and manufacturing industry. That’s because tourism depends upon economical and national stability, in case of a conflict on French lands, tourists will not be attracted and ...


0

What stops it are the basic laws of supply and demand. A highly negative interest rate means that someone will pay you to take their money. There are very few people willing to offer credit on those terms. This is the equivalent of me offering someone 100 dollars today and asking for 90 dollars in return tomorrow, with the added risk of not receiving all ...


0

Pretty much yes. It is because cash carries implicit zero interest in itself. In practice interest rates can be little bit negative because having all your money in form of cash could be dangerous (you might get robbed, also it’s not easy to store let’s say 20000e at home etc.). However, if a country would went cashless the central bank could in principle ...


Top 50 recent answers are included