The world's central banks should get ready for negative interest rates

[tyz]

Kenneth Rogoff, a professor at Harvard University and one of the world's most prominent economists, said central banks across the globe must start preparing themselves to introduce negative interest rates during the next global recession.

Negative rates are already in place in several major economies around the world, with the European Central Bank, the Bank of Japan, but other banks around the world would be wise to make preparations as well, Rogoff wrote in a new paper for the Journal of Economic Perspectives.

He said:
"The growth of electronic payment systems and the increasing marginalisation of cash in legal transactions creates a much smoother path to negative rate policy today than even two decades ago."

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[davis196]

Kenneth Rogoff, a professor at Harvard University and one of the world's most prominent economists, said central banks across the globe must start preparing themselves to introduce negative interest rates during the next global recession.

Negative rates are already in place in several major economies around the world, with the European Central Bank, the Bank of Japan, but other banks around the world would be wise to make preparations as well, Rogoff wrote in a new paper for the Journal of Economic Perspectives.

He said:
"The growth of electronic payment systems and the increasing marginalisation of cash in legal transactions creates a much smoother path to negative rate policy today than even two decades ago."

Negative interest rates will kill the financial industry and help for mass cryptocurrency adoption around the world.There`s no point to deposit money in the banks anymore.They are funded only with loans from the central banks,which print money and increase the "marginalization of cash".
Thank you very much bankers.Bitcoin and the other cryptocurrencies will succeed because of your failure.

[mattermaster]

Banks are baked by depositors, i hope banks should face a bigger demolishment soon because cryptocurrncies have taken much place in whole world's economy and in the hearts of traders as well.
I would like to decrease use of banks right now rather than cryptocurrencies if all people in my locality start accepting cryptocurrency.

[Idrisu]

Negative interest rates means a plus for bitcoin and crytocurrency generally. I do believe that one of this days bitcoin will become the world most adopted currency. Bank has not been do well lately and I think it because of the transfer people are now making through bitcoin and some others coins. Resection is going to create economic diversification and bitcoin will be the best option for the world's central bank.

[Palmerson]

Negative financial rates are only for banks. For people, they will remain plus. Perhaps this will begin reducing the cash weight and the gradual transition to cashless payments. Bitcoin also can stop its growth simply because of lack of money. View.

[pinkflower]

Shouldnt the central banks let the recession take its course than force to reverse it by manipulating the money supply? They are building a foundation of the worst of the worth of economic rescessions by pumping the economy with a method so artificial.

[HTracer]

FED, ECB, BOJ balance sheets bulged to no one knows what to do but again it's a call for injection of more printed money in banking system. That helicopter policy is getting insane.

[skyline247]

Kenneth Rogoff, a professor at Harvard University and one of the world's most prominent economists, said central banks across the globe must start preparing themselves to introduce negative interest rates during the next global recession.

Negative rates are already in place in several major economies around the world, with the European Central Bank, the Bank of Japan, but other banks around the world would be wise to make preparations as well, Rogoff wrote in a new paper for the Journal of Economic Perspectives.

He said:
"The growth of electronic payment systems and the increasing marginalisation of cash in legal transactions creates a much smoother path to negative rate policy today than even two decades ago."

Negative interest rates will kill the financial industry and help for mass cryptocurrency adoption around the world.There`s no point to deposit money in the banks anymore.They are funded only with loans from the central banks,which print money and increase the "marginalization of cash".
Thank you very much bankers.Bitcoin and the other cryptocurrencies will succeed because of your failure.

Why on Earth would a bank lend money in order to lose it? Isn't that what negative interest rates are? You get PAID to borrow money? AM I missing something here? How does anyone profit by lending money with negative interest rates? I am guessing they rely only on someone not paying back the loan or spending it foolishly to take whatever collateral is put against it. That is actually the only way to profit. If this happens you can rest assured crypto will soar and take over. There is no doubt about it.

[Rahar02]

Negative interest rates will kill the financial industry and help for mass cryptocurrency adoption around the world.There`s no point to deposit money in the banks anymore.They are funded only with loans from the central banks,which print money and increase the "marginalization of cash".
Thank you very much bankers.Bitcoin and the other cryptocurrencies will succeed because of your failure.

Indeed, this situation could be caused by cryptocurrencies, especially bitcoin which is better than current bank systems with all of their games to get higher interest from people. But, there are still many people who willing to deposit their money and lends money from banks obviously because not all of people in the world know about bitcoin. Except in Japan which already regulated bitcoin as a legal payment.

[Carlsen]

Kenneth Rogoff, a professor at Harvard University and one of the world's most prominent economists, said central banks across the globe must start preparing themselves to introduce negative interest rates during the next global recession.

Negative rates are already in place in several major economies around the world, with the European Central Bank, the Bank of Japan, but other banks around the world would be wise to make preparations as well, Rogoff wrote in a new paper for the Journal of Economic Perspectives.

He said:
"The growth of electronic payment systems and the increasing marginalisation of cash in legal transactions creates a much smoother path to negative rate policy today than even two decades ago."

Negative interest rates will kill the financial industry and help for mass cryptocurrency adoption around the world.There`s no point to deposit money in the banks anymore.They are funded only with loans from the central banks,which print money and increase the "marginalization of cash".
Thank you very much bankers.Bitcoin and the other cryptocurrencies will succeed because of your failure.

Why on Earth would a bank lend money in order to lose it? Isn't that what negative interest rates are? You get PAID to borrow money? AM I missing something here? How does anyone profit by lending money with negative interest rates? I am guessing they rely only on someone not paying back the loan or spending it foolishly to take whatever collateral is put against it. That is actually the only way to profit. If this happens you can rest assured crypto will soar and take over. There is no doubt about it.

A negative interest is the leading interest from the central bank.
Every bank must have an account at a central bank. Money has to be on that account to a certain degree, that demands the law.
With positive base rate of interests they get money for that, is it negative the banks have to pay the central bank.
The banks try to pass that negative interest on to their customers who have money on their bank account.
And of course, if they give somebody a loan, they don't do that for negative interests.

[Chyton]

That would be bad  , in that case cryptocurrency will be the only way people can hold their assets without losing a part of it every month (assuming cryptocurrency prices don't go downhill)

[HeRetiK]

Negative financial rates are only for banks. For people, they will remain plus. Perhaps this will begin reducing the cash weight and the gradual transition to cashless payments. Bitcoin also can stop its growth simply because of lack of money. View.

It will only be a matter of time until banks pass the negative interest rates on to their customers. I know a broker that already does this.

Shouldnt the central banks let the recession take its course than force to reverse it by manipulating the money supply? They are building a foundation of the worst of the worth of economic rescessions by pumping the economy with a method so artificial.

Manipulating the money supply to influence the economy is what central banks do. Whether they do it well is a different question. Luckily we all know a hedge against monetary policies gone awry.

That would be bad  , in that case cryptocurrency will be the only way people can hold their assets without losing a part of it every month (assuming cryptocurrency prices don't go downhill)

Well in that case I guess the former will prevent the latter from happening

Apart from that there's still stocks and simply buying stuff, which is probably what central banks want to achieve with negative interest rates.

[phr0stbyt3]

Oh yeah after this no one would give a damn about the currency about the miserable interest bank provide us. The clear attention will then be given to bitcoin the central banks won't have any other option if they want to save their economy they will have to prefer bitcoin or crypto currencies and that is the time the banks sufferring will be a profit for us

[Ctn]

If that's really true then bitcoin might just see even better days in the future. If negative rates are applied then who would keep their money in the banks really ? There will be no reason at all to keep our money in the bank as its our hard earned money and we might just prefer the bitcoin as it is decentralised there won't be any affects of recession on crypto world. Instead the bitcoin will get more valuation due to heavy volumes being put on it. That would be the way when you will see rich people everywhere. Kudos to that.

[olushakes]

Kenneth Rogoff, a professor at Harvard University and one of the world's most prominent economists, said central banks across the globe must start preparing themselves to introduce negative interest rates during the next global recession.

Negative rates are already in place in several major economies around the world, with the European Central Bank, the Bank of Japan, but other banks around the world would be wise to make preparations as well, Rogoff wrote in a new paper for the Journal of Economic Perspectives.

He said:
"The growth of electronic payment systems and the increasing marginalisation of cash in legal transactions creates a much smoother path to negative rate policy today than even two decades ago."

I have actually not read much about negative interest but I will have to update my knowledge on that but even if that is possible and became implemented then I see a boom for the crypto because that would mean people will have to move their money into bitcoin especially since the financial system of the fiat would have failed once more again.

[Beerwizzard]

"The growth of electronic payment systems and the increasing marginalisation of cash in legal transactions creates a much smoother path to negative rate policy today than even two decades ago."

Omg, that sounds bad.
The trand is horrifying. Combining the negative interest rates with the policy of removing cash and our money will be in a great danger because we can't evade the bank system and crypto is not yet popular. Due to this system we will be forced to keep our money in banks and pay for the bank's service or just spend it asap.

[kingntking]

Kenneth Rogoff, a professor at Harvard University and one of the world's most prominent economists, said central banks across the globe must start preparing themselves to introduce negative interest rates during the next global recession.

Negative rates are already in place in several major economies around the world, with the European Central Bank, the Bank of Japan, but other banks around the world would be wise to make preparations as well, Rogoff wrote in a new paper for the Journal of Economic Perspectives.

He said:
"The growth of electronic payment systems and the increasing marginalisation of cash in legal transactions creates a much smoother path to negative rate policy today than even two decades ago."

That should be an alarm, you should stop pranking the banks else they would come looking for you, banks are not going to be having negative interest rates because bitcoin still has to be exchanged to real cash and that’s where banks come in. except we integrate bitcoin into our society fully before banks would get negative rates.

[Hydrogen]

The idea of widespread economic and financial changes caused by simply raising or lowering rates isn't something that I strongly believe in.

If someone decides to save money in a bank, many don't bother to check interest rates or shop around to find the savings account which pays out the highest annual percentage yield. If people want to save, they save. If they decide they want to spend, they spend. The only ones who look at interest rates to decide whether they're saving or buying or what their financial outlook and planning for the next year looks like are probably one percenters, the wealthy, the elites. The vast majority of people don't know what current interest rates are, much less what the term means.

This idea that people have where they think interest rates will have widespread consequences for normal people could be farfetched. Interest rates are treated like a keyboard that has only 1 button in it. Economists claim they can cause widespread economic prosperity or disaster simply by pressing a single button. The truth is 99% of people will buy/sell/save and don't care what interest rates are. Most people don't care about their credit rating or interest rates and many of them don't understand how either of those things affect their credit card payments, house or car loans. The only people who care about interest rates are the wealthy, thus interest rates only affect the financial/economic behavior of those who are rich.

[iram1011]

The idea of widespread economic and financial changes caused by simply raising or lowering rates isn't something that I strongly believe in.

If someone decides to save money in a bank, many don't bother to check interest rates or shop around to find the savings account which pays out the highest annual percentage yield. If people want to save, they save. If they decide they want to spend, they spend. The only ones who look at interest rates to decide whether they're saving or buying or what their financial outlook and planning for the next year looks like are probably one percenters, the wealthy, the elites. The vast majority of people don't know what current interest rates are, much less what the term means.

This idea that people have where they think interest rates will have widespread consequences for normal people could be farfetched. Interest rates are treated like a keyboard that has only 1 button in it. Economists claim they can cause widespread economic prosperity or disaster simply by pressing a single button. The truth is 99% of people will buy/sell/save and don't care what interest rates are. Most people don't care about their credit rating or interest rates and many of them don't understand how either of those things affect their credit card payments, house or car loans. The only people who care about interest rates are the wealthy, thus interest rates only affect the financial/economic behavior of those who are rich.

Here we aren't talking about less interest rate but negative interest rate which means that you have to pay banks to keep your money in their saving accounts. You won't be earning any return on your saving amount but instead you need to pay bank. This will definitely have an impact on account holders. They will take their money out of the banks and will put in other assets where they can grow their money effectively. In such situations crypto world can be a good replacement and would reap the benefit.

[a4ndr3w]

Oh yeah after this no one would give a damn about the currency about the miserable interest bank provide us. The clear attention will then be given to bitcoin the central banks won't have any other option if they want to save their economy they will have to prefer bitcoin or crypto currencies and that is the time the banks sufferring will be a profit for us

I think many in the financial system prefer to see a crisis than accept the blockchain. 

[deisik]

Negative financial rates are only for banks. For people, they will remain plus. Perhaps this will begin reducing the cash weight and the gradual transition to cashless payments. Bitcoin also can stop its growth simply because of lack of money. View.

That's unlikely

Bitcoin can in fact stop its growth but certainly not because of lack of money (remember, the Stone Age didn't end for the lack of stones). If anything, there will always be enough fiat to fuel Bitcoin future growth for the simple reason that Bitcoin monetary supply is limited. With future growth there will less and less supply of coins (since otherwise the price wouldn't rise), and thus less fiat will be needed to push Bitcoin price higher. That's also one of the reasons we are likely to see insane volatilities quickly following price surges

[deisik]

Negative financial rates are only for banks. For people, they will remain plus. Perhaps this will begin reducing the cash weight and the gradual transition to cashless payments. Bitcoin also can stop its growth simply because of lack of money. View.

That's unlikely to happen

Bitcoin can in fact stop its growth but certainly not because of lack of money (remember, the Stone Age didn't end for the lack of stones). If anything, there will always be enough fiat to fuel future growth for the simple reason that Bitcoin monetary supply is limited. With future growth there will be less and less supply of coins (since otherwise the price wouldn't rise), and thus less fiat will be needed to push Bitcoin price higher. That's also one of the reasons we are likely to see insane volatilities quickly following price surges

[Bitcoincole]

Negative financial rates are only for banks. For people, they will remain plus. Perhaps this will begin reducing the cash weight and the gradual transition to cashless payments. Bitcoin also can stop its growth simply because of lack of money. View.

That's unlikely to happen

Bitcoin can in fact stop its growth but certainly not because of lack of money (remember, the Stone Age didn't end for the lack of stones). If anything, there will always be enough fiat to fuel future growth for the simple reason that Bitcoin monetary supply is limited. With future growth there will be less and less supply of coins (since otherwise the price wouldn't rise), and thus less fiat will be needed to push Bitcoin price higher. That's also one of the reasons we are likely to see insane volatilities quickly following price surges

Yeah! that is absolutely gain negative interest rates soon if this digital currencies performing well as soon as the investors see the difference especially the quotation of interest be the basis of evidence. Because many people would rely to the fast and easy way of trasancting with a cheapest interest of amortization.

[Razick]

The idea of widespread economic and financial changes caused by simply raising or lowering rates isn't something that I strongly believe in.

If someone decides to save money in a bank, many don't bother to check interest rates or shop around to find the savings account which pays out the highest annual percentage yield. If people want to save, they save. If they decide they want to spend, they spend. The only ones who look at interest rates to decide whether they're saving or buying or what their financial outlook and planning for the next year looks like are probably one percenters, the wealthy, the elites. The vast majority of people don't know what current interest rates are, much less what the term means.

This idea that people have where they think interest rates will have widespread consequences for normal people could be farfetched. Interest rates are treated like a keyboard that has only 1 button in it. Economists claim they can cause widespread economic prosperity or disaster simply by pressing a single button. The truth is 99% of people will buy/sell/save and don't care what interest rates are. Most people don't care about their credit rating or interest rates and many of them don't understand how either of those things affect their credit card payments, house or car loans. The only people who care about interest rates are the wealthy, thus interest rates only affect the financial/economic behavior of those who are rich.

Here we aren't talking about less interest rate but negative interest rate which means that you have to pay banks to keep your money in their saving accounts. You won't be earning any return on your saving amount but instead you need to pay bank. This will definitely have an impact on account holders. They will take their money out of the banks and will put in other assets where they can grow their money effectively. In such situations crypto world can be a good replacement and would reap the benefit.

The world's banks should get ready for BITCOIN! Bitcoin is a lot better in many ways to physical gold, and actually is divisible moreso than the USD. 1 Satoshi is currently worth far less than a cent. The ultimate goal is getting it to be worth 1 cent (FYI, Satoshi = smallest unit of BTC). If we can do this, the banks's only hope is to embrace and include cryptocurrencies in their business models.