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If interest rates are kept near zero and central banks open deposit accounts, the role of the banking system disappears. Their main role is to allocate money ba
by lifty 6y ago
If interest rates are kept near zero and central banks open deposit accounts, the role of the banking system disappears. Their main role is to allocate money based on their risk management framework, but if money costs zero this need is very diminished.
- perfunctory 6y ago> but if money costs zero this need is very diminished. commercial loan rates are nowhere near zero. I don't see what it has to do with CBDC.
- toomuchtodo 6y agoRates in question are the rates set by central banks, not commercial lending rates.
- toomuchtodo 6y agoCentral banks are attempting to prop up the banking system (through regulatory means) in light of WeChat and crypto currencies demonstrating a reduced need for the sector and the deposit services they offer.