Sweden sets negative interest rate
http://www.riksbank.com/templates/Page.aspx?id=32047
"The minutes from the Executive Board’s monetary policy discussion will be published on 16 July. The decision on the repo rate will apply with effect from Wednesday, 8 July. The deposit rate is at the same time cut to -0.25 per cent and the lending rate to 0.75 per cent."
A cull from Mish's Global Economic Trend Analysis.
Now, please someone explain this to me. This looks like it's basically forcing people to not save through the banking system. So, given that deposits are now at negative interest, why not just hold cash, depriving banks of an opportunity to recapitalize through savings?
I must be reading something wrong.
"The minutes from the Executive Board’s monetary policy discussion will be published on 16 July. The decision on the repo rate will apply with effect from Wednesday, 8 July. The deposit rate is at the same time cut to -0.25 per cent and the lending rate to 0.75 per cent."
A cull from Mish's Global Economic Trend Analysis.
Now, please someone explain this to me. This looks like it's basically forcing people to not save through the banking system. So, given that deposits are now at negative interest, why not just hold cash, depriving banks of an opportunity to recapitalize through savings?
I must be reading something wrong.