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> are the (targets for) rates that regular banks pay ...surely, though, this means that it's only relevant if a broad number of banks decide to adopt the 'offi
by shadowmint 11y ago
> are the (targets for) rates that regular banks pay
...surely, though, this means that it's only relevant if a broad number of banks decide to adopt the 'official' interest rate.
Unless there's some legal penalty to doing so, I don't understand why the swiss banks are simply refusing to adopt the -ve rate.
- dragonwriter 11y ago> ...surely, though, this means that it's only relevant if a broad number of banks decide to adopt the 'official' interest rate. Central banks are often either governed in substantial part by member banks who are also the largest banks in the economy (as is the case with the US Federal Reserve) and/or have influence that can be used to align practical interbank lending rates with the target rates (if they didn't, rate setting would be immaterial), such as the ability to issue banknotes and lend them themselves at the target rate.