ECB Banksters Introduce New Concept (SCAM) ) 'Negative Interest Rates'Submitted by emalvini on Wed, 06/27/2012 - 21:43
ECB Banksters Introduce NEW Concept (SCAM) 'NEGATIVE INTEREST RATES'
June 27, 2012
It’s a sure sign fractional reserve banking is on the rocks. It looks like European Central Bank President Mario Draghi will cut ECB interest rates below zero.
In other words, instead of realizing a return by holding money in a bank – albeit at a miniscule 0.25% as the Fed currently does – the ECB will charge institutional customers to use their money.
But here’s the logic, according to Bloomberg:
If the deposit rate was cut to zero or lower, it would discourage banks from parking excess liquidity with the ECB overnight, potentially prompting them to lend the cash instead. Almost 800 billion euros ($1 trillion) is being deposited with the ECB each day.
On the other hand, a deposit rate cut could hurt banks’ profitability by lowering money-market rates, potentially hampering credit supply to companies and households and reducing banks’ incentive to lend to other financial institutions.