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Private banks charge interest in general because that’s the opportunity cost of that money.
by tjs8rj 6y ago
Private 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.