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> So they tell you, fine, we'll take your money but we're gonna charge you for the service of keeping it safe. It'll be 1% a year and now you can sleep better a
by vonmoltke 7y ago
> So they tell you, fine, we'll take your money but we're gonna charge you for the service of keeping it safe. It'll be 1% a year and now you can sleep better at night.
Banks in Europe are charging people a percentage to hold their money? That's a bit of context that helps, since that is unheard of in the US. At worst they charge flat fees, and that's usually for having too little money.
- gridlockd 7y ago> Banks in Europe are charging people a percentage to hold their money? The European Central Bank charges banks negative interest to hold their money for them, which is a reserve requirement. Those costs may be forwarded to customers (but 1% is not a realistic figure). Either way, you don't want to store your money at a bank beyond what is insured. > That's a bit of context that helps, since that is unheard of in the US. As of yet, but that might change.
- dragonwriter 7y agoNow that other people have tried it out, the Fed is likely to consider negative rates as an available tool. See, e.g.: https://www.frbsf.org/economic-research/publications/economic-letter/2019/february/how-much-could-negative-rates-have-helped-recovery/ https://www.frbsf.org/economic-research/publications/economi...
- vonmoltke 7y ago> The European Central Bank charges banks negative interest to hold their money for them, which is a reserve requirement. The ECB requires the reserve be deposited with them? There is no "vault cash" provision like the US?
- gridlockd 7y agoVault cash is possible, but that costs upkeep too. It does limit the central bank ability to go deeply negative though, which is one argument for going "cashless".