3 ms·
Sure, yes. But OTOH I'm not sure the distinction you make is meaningful. If there was no risk, the cost to borrow would tend towards zero. Any liquidity issues
by orra 6y ago
Sure, yes. But OTOH I'm not sure the distinction you make is meaningful. If there was no risk, the cost to borrow would tend towards zero.
Any liquidity issues could be addressed by the central bank, again at low interest if no risk.
- tjs8rj 6y agoPrivate banks charge interest in general because that’s the opportunity cost of that money.
- orra 6y agoInterest rates for savers are record low. That's the opportunity cost for the savers. And a central bank of a sovereign country can arbitrarily increase liquidity, pushing down the non-risk part of the interest rate. But interest rates for borrowers, as I said, can be high, depending upon the risk profile.