Posts Tagged ‘Negative Interest Rates’

The earliest forms of banking simply involved people paying vault owners to keep their gold safe. Therefore we can definitely say people had negative interest rates then. Could we end up having negative interest rates again? Yes, if depositors accept it. The main risk is represented by the fact that as explained by the fractional reserve banking, most of the money in existence is simply created by commercial […]

Negative interest rates involved depositing money that attracts a charge rather than earning interest. In this case, the negative rate is applied when commercial banks deposit with the US central bank. The idea behind this is that the banks will not deposit any more than is necessary with the US central bank and instead will lend the money, or invest in more profitable business activities with […]