Before, save money in the bank was positive.
Now, however, Danish companies pay advance taxes to part with their cash. In the case of a small Swiss bank, the money deposited by customers is reduced by 0.125% (one-eighth of a point) a year.
By Tommy Stubbington / lat.wsj.com
Not everything is bad. Some Danes who have variable rate mortgages have noticed that their banks are paid every month for being in debt, instead of charging interest on their mortgages.
It is life in the world to reverse the negative interest rates, which banks charge their customers to keep their funds instead of paying interest on their deposits.
The deposit rate the European Central Bank traditionally paid to banks for the money spent immobilized in the state last week of -0.2 to -0.3 (now the banks that the ECB pay for parking their funds there ). Three of the younger residents of the euro zone, Denmark, Sweden and Switzerland have taken their even negative rates before the ECB cuts interest rates to the territory, which has produced a series of unusual outcomes with ramifications that affect everyone from large companies to consumers. These countries offer a glimpse of what might happen if the euro zone goes further into the path of negative rates.
"I do not think we've seen the last of this trend," says Jes Asmussen, chief economist for the bank Handelsbanken Denmark. "When I formed as an economist, the negative rates did not appear in textbooks. But it is the world in which we now live and has not stopped spinning. "
Negative rates were not anyone's plans. In economics, zero is the floor. However, the stagnation of the continent has been so long and hard to resolve the region's central banks are cutting interest rates to stimulate activity. If it is beneficial to reduce rates of 1% to 0.5% and then to 0%, then why not try -0.5% ?.
The European adventure with negative rates just beginning and the end is not clear. The negative rate of deposits of the ECB has helped to reduce the value of the euro, which benefits exporters in the region. The European economy, however, is growing at a snail's pace and inflation is close to zero.