{"id":48163,"date":"2019-09-01T07:30:21","date_gmt":"2019-09-01T12:30:21","guid":{"rendered":"https:\/\/olduvai.ca\/?p=48163"},"modified":"2019-09-01T07:30:27","modified_gmt":"2019-09-01T12:30:27","slug":"lagarde-praises-negative-rates-study-shows-they-reduce-lending","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=48163","title":{"rendered":"Lagarde Praises Negative Rates, Study Shows They Reduce Lending"},"content":{"rendered":"\n

Lagarde Praises Negative Rates, Study Shows They Reduce Lending<\/a><\/h3>\n\n\n\n
\"\"\/<\/figure>\n\n\n\n

Incoming IMF chief Christine Lagarde says negative rates have helped Europe more than they\u2019ve hurt. I disagree.<\/p>\n\n\n\n

The nearly always wrong Christine Lagarde is wrong once again.<\/p>\n\n\n\n

Today she claims Negative Rates Have Helped Europe More Than They\u2019ve Hurt<\/a>.<\/p>\n\n\n\n

The next head of the European Central Bank, Christine Lagarde, appears to be as much of a fan of negative interest rates as the current chief, Mario Draghi.<\/p>

European banks have complained about the impact on profitability, but even there the current managing director of the International Monetary Fund defended the move.<\/p>

\u201cOn the one hand, banks may decide to pass the negative deposit rate on to depositors, lowering the interest rates the latter get on their savings,\u201d she wrote. \u201cOn the other hand, the same depositors are also consumers, workers, and borrowers. As such they benefit from stronger economic momentum, lower unemployment and lower borrowing costs. All things considered, in the absence of the unconventional monetary policy adopted by the ECB \u2013 including the introduction of negative interest rates \u2013 euro area citizens would be, overall, worse off.\u201d<\/p><\/blockquote>\n\n\n\n

Negative Rates Actually Cut Lending<\/strong><\/p>\n\n\n\n

Research shows Negative Rates Actually Cut Lending<\/a>.<\/p>\n\n\n\n

Central banks\u2019 negative interest rates were supposed to increase spending, stop deflation and stimulate the economy. They may have done the exact opposite.<\/p>

According to research from the University of Bath, central banks charging commercial banks to hold excess cash reserves have actually decreased lending. That\u2019s because the additional costs reduce banks\u2019 profit margins, leading to a drop in loan growth.<\/p>

\u201cThis is a good example of unintended consequences,\u201d said Dr. Ru Xie of the university\u2019s School of Management, one of the study\u2019s authors. \u201cNegative interest rate policy has backfired, particularly in an environment where banks are already struggling with profitability<\/em>.\u201d<\/p><\/blockquote>\n\n\n\n

 \u2026click on the above link to read the rest of the article\u2026<\/p>\n","protected":false},"excerpt":{"rendered":"

Lagarde Praises Negative Rates, Study Shows They Reduce Lending Incoming IMF chief Christine Lagarde says negative rates have helped Europe more than they\u2019ve hurt. I disagree. The nearly always wrong Christine Lagarde is wrong once again. Today she claims Negative Rates Have Helped Europe More Than They\u2019ve Hurt. The next head of the European Central Bank, […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[124,233,14648,13390,558],"class_list":["post-48163","post","type-post","status-publish","format-standard","hentry","category-economics","tag-central-banks","tag-ecb","tag-michael-shedlock","tag-mishtalk","tag-negative-interest-rates"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/48163","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=48163"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/48163\/revisions"}],"predecessor-version":[{"id":48164,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/48163\/revisions\/48164"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=48163"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=48163"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=48163"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}