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BoE Governor warns lenders of challenges of negative interest rates - Sunday Times

Published 07/04/2020, 10:40 PM
Updated 07/04/2020, 10:40 PM
© Reuters.

(Reuters) - Bank of England (BoE) Governor Andrew Bailey has written a letter to lenders warning them of the challenges of negative interest rates, the Sunday Times newspaper reported.

The letter said that negative rates were "one of the potential tools under active review" if the monetary policy committee decided that "more stimulus" was needed to hit the BoE's 2% inflation target, the newspaper reported https:// It didn't disclose how it gained knowledge of the letter's content.

The report said Bailey held a meeting with heads of banks at the end of June and that negative rates were discussed in that meeting in which the governor said "every tool they have is on the table".

On negative interest rates, Bailey has previously said that they were an option for the BoE, but that the issue was complex and taking borrowing costs below zero was not in any way imminent.

 

Latest comments

What are banks essentially? Parasites! Living off of other people's money. If only people were "true" to common standard lending, banks would never exist. Banks were supposed to bridge the gap between lenders & borrowers, but they themselves became so greedy and screwed it all up..
Eventually most central banks will go on negative rates. There are few exceptions like Brazil, but most central banks in a period of 12 months from now will adopt negative rates
U get paid to borrow money. In an extreme way, u need to pay the bank. Then u would keep money under ur mattress like the old time.
The currency will lose value! Keep gold under the matress. It is safer
You don’t get paid to borrow money. The private banks will get paid to borrow money from the Central Bank. Banks will still charge you if you borrow money
Pedro is correct. Regular people will not get paid interest to borrow money. The retail banks will just increase the interest rate spread between what they borrow for vs what they charge you to borrow, so that your rate is still a positive number.
But they are managing expectatioms for the future
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