UK banks given six months to prepare for negative interest rates
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Re: UK banks given six months to prepare for negative interest rates
#2Its about time it became normal in the UK for accounts to carry fees. I dont know how retail banking can continue without them. Esp the new fintechs they will have near-zero revenue coming in and have to pay to hold cash.
Re: UK banks given six months to prepare for negative interest rates
#3Can someone explain this, Matt Levine-style? I mean, if someone offered to pay me interest to take out a loan, I'd immediately request MAXINT.
Re: UK banks given six months to prepare for negative interest rates
#4Its about time it became normal in the UK for accounts to carry fees. I dont know how retail banking can continue without them. Esp the new fintechs they will have near-zero revenue coming in and have to pay to hold cash.
Negative interest has to deal with lending (and savings) base interest rates, not as a fee per se, but as a tool of monetary policy.
Re: UK banks given six months to prepare for negative interest rates
#5Its about time it became normal in the UK for accounts to carry fees. I dont know how retail banking can continue without them. Esp the new fintechs they will have near-zero revenue coming in and have to pay to hold cash.
Why? Many banks are already making lots of money, regardless if you know how they make their money or not. I definitely do not agree that "its about time" to pay for having an account.
Re: UK banks given six months to prepare for negative interest rates
#6Can someone explain this, Matt Levine-style? I mean, if someone offered to pay me interest to take out a loan, I'd immediately request MAXINT.
This isn't Matt Levine style, or calibre, but it covers the basics:
https://www.investopedia.com/articles/investing/070915/how-n...
Re: UK banks given six months to prepare for negative interest rates
#7Can someone explain this, Matt Levine-style? I mean, if someone offered to pay me interest to take out a loan, I'd immediately request MAXINT.
The point is precisely that the Powers That Be want you to take out MAXINT - and then unload it on the wider economy as cheap loans to stimulate the economy.
Whether that second part actually happens, or banks just use this extra cash to stuff their balance sheets, well... it's a bit of an open question, to put it mildly.
Re: UK banks given six months to prepare for negative interest rates
#8Can someone explain this, Matt Levine-style? I mean, if someone offered to pay me interest to take out a loan, I'd immediately request MAXINT.
It’s a negative interest rate for banks to keep their money with a central bank. It is supposed to discourage banks from hoarding money and stimulate the economy by giving out more loans. Like all things economic there are debates about if it works or not.
https://www.cnbc.com/2020/06/12/do-negative-interest-rates-w...
Re: UK banks given six months to prepare for negative interest rates
#9Its about time it became normal in the UK for accounts to carry fees. I dont know how retail banking can continue without them. Esp the new fintechs they will have near-zero revenue coming in and have to pay to hold cash.
Banks' investment/trading arms get substantial tax breaks and one condition is that they have a certain number of UK retail accounts.
That's it really.
Re: UK banks given six months to prepare for negative interest rates
#10Can someone explain this, Matt Levine-style? I mean, if someone offered to pay me interest to take out a loan, I'd immediately request MAXINT.
A nominal zero or negative rate can still be a positive real rate.
It depends on future inflation/deflation. While it's easy to point at M1, M2 money stock figures (or the UK equivalent) as indicative of inflation, sometimes deflationary pressures are greater than the inflationary pressures from increasing money supply.