April 15, 2015 Leave a comment
Originally posted on Quartz:
A revolution has come to Europe–the revolution of negative interest rates. 10-year Swiss government bonds now have a negative yield. Short-term funds kept at the Swiss National Bank now pay -.75%: that is, private banks have to pay .75% per year to the Swiss National Bank to tend their Swiss francs. Denmark now pays -.75% for short-term funds while Sweden is at -.25% and the Eurozone is at -.2%. How low can interest rates go?
Ben Bernanke has started a blog, now that (in his words) he is free from “being put under the microscope by Fed watchers.” In the first few posts, he got into a debate with Larry Summers about what it means that interest rates are so low. Paul Krugman joined in with his own post “Liquidity Traps, Local and Global.” These three—a former Fed Chairman, a brilliant former Treasury Secretary…
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