3 ms·

A negative interest rate also leads people to ask the bank for a loan instead of patiently sparing money, and as far as I understand banks love this (more power

• imtringued 5y ago
  Negative interest loans for consumers would be very interesting. Assuming we allow every citizen to borrow $1000 at -1% then the effect is very similar to helicopter money because the value of the debt is being eroded by inflation and you have to pay less back than you borrowed.
  • beefield 5y ago
    I think there are/has been negative interest mortgages in Denmark[1]. And actually, after the first shock, when you have thought it through, there is not that much interesting in negative rates. Unless you have so spotless opsec that you dare store a mortgage's worth of cash somewhere for decades (and you get that much cash in first place in negative rate environments - I doubt banks are giving you that without really good excuses), you need to invest the money somewhere. Bank accounts? Of course, you get even more negative rates there. Stocks? Well, it is not that different to positive rates, you take quite some risk there. Houses? Well, that's what mortgages are for. But assuming a 100k mortgage, is that really so fundamentally different if you need to gather 99k instead of 101k from somewhere in 10 year's time? [1] https://www.theguardian.com/money/2019/aug/13/danish-bank-launches-worlds-first-negative-interest-rate-mortgage https://www.theguardian.com/money/2019/aug/13/danish-bank-la...