Negative interest rates represent a threat to the financial system.
In a negative rate world, forcing rates on short-dated debt to zero would keep the yield curve permanently inverted.
If one plugs in a negative interest rate as the discount rate, all pensions would technically be underfunded.
Its banking system is a mess, thanks to negative rates.
The first instances of modern negative interest rates arrived in Switzerland in the 1970s.
Should these countries join the rest of the developed world in moving to negative rates, the financial system will be under much more stress.
If negative rates become more widespread across the globe, then the financial system needs to be rebuilt on a new set of assumptions.
https://www.zerohedge.com/news/2019-09-04/end-unforeseeable-negative-interest-rates-threaten-entire-financial-system
In a negative rate world, forcing rates on short-dated debt to zero would keep the yield curve permanently inverted.
If one plugs in a negative interest rate as the discount rate, all pensions would technically be underfunded.
Its banking system is a mess, thanks to negative rates.
The first instances of modern negative interest rates arrived in Switzerland in the 1970s.
Should these countries join the rest of the developed world in moving to negative rates, the financial system will be under much more stress.
If negative rates become more widespread across the globe, then the financial system needs to be rebuilt on a new set of assumptions.
https://www.zerohedge.com/news/2019-09-04/end-unforeseeable-negative-interest-rates-threaten-entire-financial-system
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