4 ms·
It's deposits in a bank, yes. Many banks charge large deposit holders a negative interest rate. The alternative of holding it in actual cash, comes with securi
by cynusx 8y ago
It's deposits in a bank, yes.
Many banks charge large deposit holders a negative interest rate.
The alternative of holding it in actual cash, comes with security costs, storage costs,...
The negative interest rate is still cheaper then the 1% annual cost of securing banknotes.
It also puts an implicit floor on how low the central bank can lower the interest.
- JumpCrisscross 8y ago> Many banks charge large deposit holders a negative interest rate Counterparty risk dominates, for most treasurers. You don’t want your billions of corporate deposits in the bank that went bust. Treasuries—or their local equivalent—are a safe way to hold cash.