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> The difference is that for the first time in a long time they can’t make enough from deposits to cover that cost. Yes, and the reason they can't make enough
by tharne 5y ago
> The difference is that for the first time in a long time they can’t make enough from deposits to cover that cost.
Yes, and the reason they can't make enough is because central banks are pushing down interest rates in order to nudge people into spending vs. saving. If central banks were not acting as a lender of last resort (at record low interest rates no less), the cost to borrow would be higher, and savers would likely be seeing higher interest rates.
- Armisael16 5y agoThat isn’t penalizing savers; that just isn’t actively subsidizing them (and by extension the rest of the investing world, since that would easily be the most attractive place to have your money in the world). Also, central banks have a mandate to be the lender of last resort. It’s one of their most fundamental duties and they’ve been doing it for as long as they’ve existed.
- lottin 5y ago> the cost to borrow would be higher We don't know that, do we? It depends on the supply and demand for savings.