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The head of Germany’s largest bank says negative rates are ‘fatal’ Watch

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    Cryan says negative interest-rate policy could have ‘fatal consequences’

    Add John Cryan to the ensemble of Wall Street heavyweights decrying the emergence of negative-yielding debt.

    Cryan, the chief executive of Deutsche Bank—Germany’s largest and most prominent bank, with some €**1.7 trillion ($1.9 trillion) in assets—cautioned that the negative interest-rate policy could have “fatal consequences.” He made is remarks as part of a guest commentary published in the German newspaper Handelsblatt on Aug. 23.

    “Monetary policy is now running counter to the aims of strengthening the economy and making the European banking system safer,” Cryan said, ahead of a bank summit starting Aug. 31.

    Cryan also said negative rates punish savers and could have disastrous implications for pensions, which attempt to match their liabilities with safe, interest-bearing assets like bonds.

    Ultralow and below-zero rates have helped to push Deutsche Bank’s shares down nearly 45% on year-to-date basis. The bank has been hard hit in the wake of the U.K.’s vote on June 23 to exit from the European Union, which briefly rocked markets.

    Given its elevated profile among global financial institutions and its inability to shake of the hangover of the 2008-2009 financial crisis, the German bank has spent years under the Klieg lights of regulatory and investor scrutiny.

    The International Monetary Fund in June referred to Deutsche Bank as the riskiest financial institution in the world.

    Read More:
    http://www.marketwatch.com/story/the...tal-2016-08-25
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    Negative interest rates as a shallow monetary policy tool are fine if what you want to do is spur inflation however your right that when looking deeper they don't look so rosy, namely because they shaft savers.

    Personally speaking i'd rather stop QE and look towards raising rates. The suppressed demand that requires people to issue negative interest rates goes far deeper than simple interest adjustments and requires both an acceptance of a new normal (2% growth with 0.5% inflation is really not that bad) but also a fiscal policy geared towards fiscal multiplication.
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    (Original post by Rakas21)
    Negative interest rates as a shallow monetary policy tool are fine if what you want to do is spur inflation however your right that when looking deeper they don't look so rosy, namely because they shaft savers.

    Personally speaking i'd rather stop QE and look towards raising rates. The suppressed demand that requires people to issue negative interest rates goes far deeper than simple interest adjustments and requires both an acceptance of a new normal (2% growth with 0.5% inflation is really not that bad) but also a fiscal policy geared towards fiscal multiplication.
    http://www.realclearmarkets.com/arti...ide_98740.html

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    (Original post by Rakas21)
    Negative interest rates as a shallow monetary policy tool are fine if what you want to do is spur inflation however your right that when looking deeper they don't look so rosy, namely because they shaft savers.

    Personally speaking i'd rather stop QE and look towards raising rates. The suppressed demand that requires people to issue negative interest rates goes far deeper than simple interest adjustments and requires both an acceptance of a new normal (2% growth with 0.5% inflation is really not that bad) but also a fiscal policy geared towards fiscal multiplication.
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    Advanced Macroeconomics is ******** half the time, all those crappy DSGE models.

    Financial Markets are driven on fear and greed.
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    (Original post by momoneyme89)
    Advanced Macroeconomics is ******** half the time, all those crappy DSGE models.

    Financial Markets are driven on fear and greed.
 
 
 
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