Föhrenbergkreis Finanzwirtschaft

Unkonventionelle Lösungen für eine zukunftsfähige Gesellschaft

Posts Tagged ‘Interest’

The Politics of Negative Interest Rates

Posted by hkarner - 23. August 2016

Photo of Yanis Varoufakis

Yanis Varoufakis

Yanis Varoufakis, a former finance minister of Greece, is Professor of Economics at the University of Athens.

AUG 22, 2016, Project Syndicate

ATHENS – Objects of desire come at a cost. Only bad things, like toxic waste, have a negative price, the equivalent of a fee payable to anyone willing to make them disappear. Does this mean that negative interest rates embody a new perspective on money – that it has gone “bad”?

In market economies, money is the measure of the value of goods and services. And the interest rate is the price of that metric – of money itself. When the price is zero, it makes no difference whether money is kept under a mattress or lent, because there is no cost to holding or borrowing cash.

But how can the price of money – which, after all, makes the world go round, or, as Karl Marx put it, “transforms all my incapacities into their contrary” – be zero? And how can it possibly ever become negative, as it now is in much of the global economy, with the world’s moneyed people “bribing” governments to borrow from them more than $5.5 trillion? Den Rest des Beitrags lesen »

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What’s New About Today’s Low Interest Rates?

Posted by hkarner - 29. Juli 2016

Photo of Carmen Reinhart

Carmen Reinhart

Carmen Reinhart is Professor of the International Financial System at Harvard University’s Kennedy School of Government.

JUL 28, 2016, Project Syndicate

CAMBRIDGE – A day seldom passes without articles appearing in the financial press pondering why interest rates have remained so low for so long. This is one of those articles. So let’s start by clarifying whose and which interest rates are low and what is and isn’t novel or unprecedented.

Interest rates in emerging and developing countries are importantly affected by what happens in the world’s largest economies, and the ongoing multi-year low-interest-rate cycle has its roots in the United States, Europe, and Japan. Low rates are predominantly the advanced economies’ “new normal.”

Interest rates (short and long maturities) had been trending lower in most of the advanced economies (to varying degrees) since the 1980s, as inflation also fell sharply. In the years prior to the 2008-2009 financial crisis, former US Federal Reserve Chairman Ben Bernanke repeatedly stressed the role of a global “saving glut” (notably in China) to explain lower rates. Den Rest des Beitrags lesen »

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Why Ultralow Interest Rates Are Here to Stay

Posted by hkarner - 15. Juli 2016

Date: 14-07-2016
Source: The Wall Street Journal

While central-bank bond buying is the proximate cause of a plunge in U.S.
Treasury yields, the drop represents the cost of economic and political choices made over decades

AmplifiersYields on 10-year debt issued by the U.S. Treasury, shown, hit a record low this month.

Ultralow interest rates are here to stay.

Central-bank bond buying is the proximate cause for the plunge this month of the 10-year U.S. Treasury yield to its all-time low of 1.366%. But it would be a mistake to single out central bankers.

Slumping rates represent the cumulative cost of economic and political choices made over decades, ranging from an overreliance on debt-financed growth to creeping regulation. This sclerosis is the major driver of lower and lower interest rates, and the signs of it are evident just beneath the glossy surface of record stock and bond prices.

Companies have been borrowing at a record clip, thanks to low rates. Yet capital investment is sagging, while share buybacks have flourished in a return to the financial engineering that we were supposed to have forsworn. The Dodd-Frank financial overhaul shored up U.S. banks, but at the expense of tighter credit that has hampered recovery.

A longstanding decline in business formation has intensified in recent years, crimping new jobs and underscoring the sense that the postcrisis pursuit of stability is lulling the economy into prolonged stupor. While the U.S. is still a far cry from Japan, locked into a decades-long struggle to escape deflation, it is becoming clear that embracing risk aversion has its price.

“What we’ve got now is a more-stable, more-boring economy,” said Steven H. Strongin, head of global investment research at Goldman Sachs Group Inc. “The question is whether that’s where you want to end up.”

Amplifying these problems is the steady accumulation of debt. The financial collapse was supposed to presage an era of deleveraging that would result in a more balanced global economy. Instead, global debt levels are higher now than they were in 2007—a chronic problem that makes economies and markets everywhere less resilient. Den Rest des Beitrags lesen »

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75 Prozent aller Staatsanleihen mit negativen Zinsen

Posted by hkarner - 23. Juni 2016

András Szigetvari, 23. Juni 2016, 06:00, derstandard.at

Österreich kann sich bereits für sieben Jahre verschulden und Geld dabei verdienen – eine Folge des extremen Niedrigzinsumfelds. Viel Grund zur Freude hat dabei der Finanzminister

Wien – Ein Häuslbauer geht zu seiner Bank, um sich wegen eines Kredites über 300.000 Euro zu erkundigen. Als der Bankberater ihm sein Angebot übergibt, staunt der Immobilienbesitzer in spe nicht schlecht. Anstatt Zinsen zu bezahlen, bietet ihm das Kreditinstitut Geld an, wenn er das Darlehen aufnimmt. Was auf den ersten Blick weltfremd klingt, ist für eine Reihe von Staaten in Europa heute Realität. Investoren wie Banken, Sparkassen und Versicherungen sind bereit, Ländern Geld zu Negativzinsen zu borgen. Davon profitiert aktuell auch Österreich massiv. Am 7. Juni hat die Republik zum dritten Mal eine Staatsanleihe mit einer negativen Rendite an Investoren verkaufen können. Neu ist, dass Gläubiger inzwischen bereit sind, selbst bei Krediten mit einer sehr langen Laufzeit ein Verlustgeschäft zu machen. Den Rest des Beitrags lesen »

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Deutsche Bank: Fünf Prozent Zinsen, wenn Kunden ihr Geld nicht abheben

Posted by hkarner - 17. Mai 2016

Deutsche Wirtschafts Nachrichten  | 

In Zeiten niedriger Zinsen müssen Sparer mittlerweile damit rechnen, dass sie weniger Geld erhalten, als sie eingezahlt haben. Im Schnitt liegen die Zinsen für eine Einlage in Höhe von 10.000 Euro beim Tagesgeld zwischen 0,30 Prozent und 1,25 Prozent. Die Deutsche Bank hat ihren belgischen Kunden nun ein deutlich lukrativeres Angebot gemacht.

Die Deutsche Bank lockt mit sehr hohen Zinsen. (Foto: dpa)

Die Deutsche Bank lockt mit sehr hohen Zinsen.

Die Niedrigzinspolitik der EZB hat dazu geführt, dass die Banken in der Eurozone an ihre Privat- und Geschäftskunden ebenfalls niedrigere Zinsen weitergeben. Die Deutsche Bank hingegen hat sich nun in einem Brief an ihre belgischen Kunden mit einem äußerst verlockenden Angebot gewandt. „Eröffnen Sie ein Terminkonto und erhalten Sie 5 Prozent jährlichen Bruttozins“, heißt es in dem Schreiben. Das sei „eine exzellente Möglichkeit, ihre Gewinne zu erhöhen“. Voraussetzung ist, dass die neuen Kunden eine Einlage zwischen 10.000 und 50.000 Euro machen und diese mindesten 3 Monate nicht anrühren. Zudem schreibt die Deutsche Bank, dass das Angebot allerdings nur für belgische Bürger mit „frisch eingezahltem Geld“ und bis „24. Juni“ bei Eröffnung eines „DB Invest Plus“ Kontos gilt.

5 Prozent Zinsen auf Einlagen zwischen 10.000 und 50.000 Euro ist in Zeiten der Niedrigzinspolitik ein sehr großzügiges Angebot. Für ein Tagesgeld in Höhe von 10.000 Euro mit einer Laufzeit von drei Monaten bieten andere Banken zwischen 1,25 Prozent und 0,01 Prozent. Den Rest des Beitrags lesen »

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War of Words Over ECB Policy Reflects German (and others) Savers’ Anger With Low Interest

Posted by hkarner - 24. April 2016

Date: 23-04-2016
Source: The Wall Street Journal

Some call for Draghi’s resignation over bank’s unconventional attempts to spur growth, inflation

BERLIN—Accused of impoverishing millions and stoking populism in Germany, European Central Bank President Mario Draghi finally snapped this week. Politicians, he said, should mind their own business.

Such a war of words wasn’t supposed to happen in Germany, the country that did more than any other to establish central-bank independence as a condition for any successful monetary policy.

Far from sticking to their respective turfs, however, Mr. Draghi and German Finance Minister Wolfgang Schäuble have been sparring in public for days over the direction of monetary policy in the eurozone. Den Rest des Beitrags lesen »

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What’s Wrong With Negative Rates?

Posted by hkarner - 14. April 2016

Photo of Joseph E. Stiglitz

Joseph E. Stiglitz

Joseph E. Stiglitz, recipient of the Nobel Memorial Prize in Economic Sciences in 2001 and the John Bates Clark Medal in 1979, is University Professor at Columbia University, Co-Chair of the High-Level Expert Group on the Measurement of Economic Performance and Social Progress at the OECD, and Chief Economist of the Roosevelt Institute. A former senior vice president and chief economist of the World Bank and chair of the US president’s Council of Economic Advisers under Bill Clinton, in 2000 he founded the Initiative for Policy Dialogue, a think tank on international development based at Columbia University. His most recent book is Rewriting the Rules of the American Economy.

APR 13, 2016, Project Syndicate

NEW YORK – I wrote at the beginning of January that economic conditions this year were set to be as weak as in 2015, which was the worst year since the global financial crisis erupted in 2008. And, as has happened repeatedly over the last decade, a few months into the year, others’ more optimistic forecasts are being revised downward.

The underlying problem – which has plagued the global economy since the crisis, but has worsened slightly – is lack of global aggregate demand. Now, in response, the European Central Bank (ECB) has stepped up its stimulus, joining the Bank of Japan and a couple of other central banks in showing that the “zero lower bound” – the inability of interest rates to become negative – is a boundary only in the imagination of conventional economists. Den Rest des Beitrags lesen »

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The Broader View: The Positive Effects of Negative Nominal Interest Rates

Posted by hkarner - 12. April 2016

Posted on by iMFdirect

By Jose ViñalsSimon Gray, and Kelly Eckhold

Version in Deutsch (German), 日本語 (Japanese)

We support the introduction of negative policy rates by some central banks given the significant risks we see to the outlook for growth and inflation. Such bold policy action is unprecedented, and its effects over time will vary among countries. There have been negative real rates in a number of countries over time; it is negative nominal rates that are new. Our analysis takes a broad view of recent events to examine what is new, country experiences so far, the effectiveness of negative nominal rates as well as their limits and their unintended consequences. Although the experience with negative nominal interest rates is limited, we tentatively conclude that overall, they help deliver additional monetary stimulus and easier financial conditions, which support demand and price stability. Still, there are limits on how far and for how long negative policy rates can go.

Why are central banks using negative policy rates?

Once policy rates are cut to what used to be known as the ‘zero lower bound’, central banks can employ unconventional monetary policy measures to provide further stimulus if real interest rates are still above the levels consistent with price stability and full employment. Negative nominal policy interest rates are the latest addition to this unconventional toolkit. Six central banks so far have introduced negative rates that apply to some amount of the cash balances commercial banks hold with the central bank (Table 1).  Negative rates aim to encourage the private sector to spend more and support price stability by further easing monetary and financial conditions. For smaller open economies, negative rates can also help discourage capital inflows and reduce exchange rate appreciation pressures. Den Rest des Beitrags lesen »

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Germany’s Schäuble: Time is Near to End Central Banks’ Easy-Money Policies

Posted by hkarner - 11. April 2016

Date: 10-04-2016
Source: The Wall Street Journal

Finance Minister makes remarks amid growing criticism in Germany of European Central Bank

Schäuble ccWolfgang Schauble. The German Finance Minister Friday night called on governments to encourage their central banks to gradually move away from easy-money policies.

German Finance Minister Wolfgang Schäuble called on governments in Europe and the U.S. to encourage their central banks to gradually exit easy-money policies, in the strongest sign yet of Berlin’s growing impatience with the ultralow interest rates of the European Central Bank.

“There is a growing understanding that excessive liquidity has become more a cause than a solution to the problem,” Mr. Schäuble said, comparing the move away from easy-money policies to ending a drug addiction.

The unusually blunt comments from Chancellor Angela Merkel’s closest political ally come as the ECB has repeatedly ramped up its stimulus in recent months, seeking to support economic growth in the face of rising global headwinds and financial-market volatility. Den Rest des Beitrags lesen »

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Negative Interest Rates Benefit the Global Economy, Says IMF Chief Christine Lagarde

Posted by hkarner - 6. April 2016

Date: 06-04-2016

Source: The Wall Street Journal

IMF LagardeSide-effects need to be monitored, says International Monetary Fund Managing Director

FRANKFURT—Subzero interest rates in Europe and Japan are “net positives” for the global economy, International Monetary Fund chief Christine Lagarde said Tuesday, though she warned that the side effects of unorthodox central-bank policies should be closely monitored.

Speaking ahead of the IMF’s Spring meetings in Washington, D.C., next week, Ms. Lagarde praised recent policy moves by the European Central Bank and the U.S. Federal Reserve, and called on governments to play their part by introducing growth-friendly reforms.

“We are on alert, not alarm” on the outlook for the global economy, Ms. Lagarde told an audience at Frankfurt University. She pointed to a “loss of growth momentum” over the past six months, “exacerbated by China’s relative slowdown, lower commodity prices, and the prospect of financial tightening for many countries.” Den Rest des Beitrags lesen »

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