Negative percentage. Negative rates have stunned the financial world In the face of negative rates, a

The Rixbank, Sweden's central bank, was the first central bank in the world to introduce negative interest rates on bank deposits in July. The phenomenon is quite remarkable in itself, but at the moment it is more interesting because other countries that want to achieve an increase in lending volumes may follow Sweden’s example, writes the Financial Times.

The world's central banks are closely monitoring " Swedish experiment" Governor of the Bank of England Mervyn King hinted that his department may well follow the Swedish example, since the threat of a liquidity trap for the UK (money “stuck” in the banking sector and not flowing into the real economy) is too great.

“If there are no signs of an end to this trend in the coming months, the Bank of England may resort to negative interest rates. In essence, this is a fine for banks that refuse to issue loans,” said a representative of RBC Capital Markets John Reith.

However, the European Central Bank is unlikely to charge banks for deposits, experts believe.

Frightened by the financial crisis and the defaults of their clients on debt obligations, banks are in no hurry to issue new loans, but prefer to accumulate money. Deposits with the Central Bank are considered one of the safest options.

Previously, it was expected that Japan would be the first to resort to such a measure, however, even having reached the bottom of the crisis, the Bank of Japan did not dare to force banks to pay for placing deposits.

The Riksbank's key interest rate, the repo rate, is 0.25%, the rate on loans issued by the Central Bank is 0.75%, on deposits - minus 0.25%.

The most vocal supporter of negative rates in Sweden is the Deputy Governor of the Riksbank Lars Svensson, a recognized expert on the theory of monetarism, who works closely with the head of the US Federal Reserve Ben Bernanke, with whom they worked together at Princeton. However, in the United States, the possibility of introducing negative interest rates is almost not discussed, since the very idea of ​​this is alien to American economists, the article notes.

“There is nothing strange about negative interest rates,” says Svensson. He is convinced that for central banks it is a monetary policy tool like any other, they just need to know when to use it.

Experts note, however, that Swedish banks have traditionally not used the opportunity to place funds with the Central Bank as widely as in other European countries, so the effect of a negative rate is limited. In the UK, it will be more noticeable, since the volume of deposits of commercial banks with the Central Bank increased almost fivefold from March to the end of July - from 31 billion to 152 billion pounds sterling.

Negative percentage

NEGATIVE PERCENTAGE

(negative interest) A deduction made by a bank or other depository institution for holding an amount of money for a specified period.

Finance. Dictionary. 2nd ed. - M.: "INFRA-M", Publishing House "Ves Mir". Brian Butler, Brian Johnson, Graham Sidwell and others. General editor: Ph.D. Osadchaya I.M.. 2000 .

Negative percentage

Negative interest is the interest charged by the bank for having a deposit account, applied to deposits of foreigners in national currency.
Negative interest is a fiscal measure used to restrict the inflow of foreign capital.

In English: Negative interest

Synonyms: Negative percentage

English synonyms: Interest charge

See also: Bank interest rates Deposits

Finam Financial Dictionary.

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In some Swiss banks, interest rates on retail deposits have already dropped below zero. Are negative interest rates on deposits possible in Russia?

Of course, negative rates are a nightmare for savers, but they would be very welcome for borrowers. Imagine: you take a ruble and return fifty dollars. Dream!

Of course, savvy investors can combat negative rates by moving into cash. However, for a VIP, going to the cache is not an option. After all, the costs of storing and transporting cash can “eat up” up to 1% per year.

Essentially, negative deposit rates are the equivalent of a tax on money. Previously, negative rates were considered a theoretical delight. Although initially “proto-banks” (for example, goldsmiths) charged a fee for storing money - for placing deposits.

The idea of ​​demurrage, negative interest rates, by German businessman and social reformer Silvio Gesell (1862-1930) was not seriously considered for a long time. It was believed that the natural limit on interest rates was zero.

However, already in April 2009, Gregory Mankiw predicted a negative Fed key rate in the New York Times. If lower interest rates stimulate the economy, and the key rate is already close to zero, why not reduce the rate to negative values? The idea of ​​negative rates seems absurd: lend a dollar, get 99 cents. But the idea of ​​negative numbers, reminds Mankiw, initially seemed absurd.

Mankiw’s prediction quickly came true, although not with regard to the Fed: in July 2009, the Riksbank, Sweden’s central bank, introduced negative rates.

Then negative key rates were established in a number of other countries, including Switzerland, Japan, Denmark, as well as in the eurozone countries (deposit rate - -0.4% per annum). Moreover, negative interest rates have also been established in the interbank lending markets of some countries. Bond yields have also turned negative in some countries.

The Japanese and Germans responded to ultra-low interest rates by increasing demand for safes. Negative rates pose a threat of a run on banks and can lead to a liquidity crisis.

Probably the first bank to upset its customers with negative interest rates on deposits was Alternative Bank Schweiz, which since 2016 introduced a rate of -0.75% on deposits worth more than 100 thousand Swiss francs. Another well-known Swiss bank, Lombard Odier, upsets its wealthy clients in the same way. So the first victims of negative deposit rates are wealthy clients - it is difficult for them to “escape to cash”.

Are negative rates possible in Russia? Not excluded. The condition for their appearance may be deflation. Deflation itself is pleasant and useful for consumers - what's wrong with falling prices? However, it is not deflation that is bad, but its main reason - a reduction in demand - for example, due to a crisis. People don't have money to buy goods, so prices are falling. Of course, if the reason for the decline in prices is a reduction in production costs, for example, as a result of technological progress, then one can only rejoice at such deflation.

For now, the threat of negative interest rates in Russia appears to be low. However, a recession may lead to the realization of this threat. It is possible to soften monetary policy even to negative interest rates.

The Russian banking community came up with the idea of ​​introducing negative interest rates on deposits in foreign currency. The Central Bank did not support the initiative. As a result, banks may refuse to accept deposits in euros from the public.

Why is the Central Bank against

​Commenting on its decision, the Central Bank gave two arguments. Firstly, “the practice of establishing negative rates exists only in certain eurozone countries and for individual transactions”; secondly, this could “lead to the accumulation of large volumes of foreign exchange liquidity outside the banking system,” that is, to the growth of the shadow foreign exchange market.

The Central Bank may have other reasons to object to the introduction of negative rates on client foreign currency funds, bankers say. “In addition to the business component, there is an image component. Many clients, especially individuals, may perceive negative rates negatively,” says Andrey Stepanenko, deputy chairman of the board of Raiffeisenbank. Sberbank chief analyst Mikhail Matovnikov agrees that “the emergence of negative rates is quite a serious negative.”

The banking community can solve the problem on its own. It is easier for bankers to stop attracting liquidity in euros by removing the corresponding deposits from their product line for individuals, market participants indicate. “As for individuals, the solution may be to stop attracting new deposits in euros,” Stepanenko told RBC, adding that Raiffeisenbank is considering this possibility. In his opinion, other players may also choose this strategy. As a result, Russians' ability to diversify their savings will decrease.

However, so far there is no consensus in the banking community on this matter. Sberbank and Citibank declined to comment on plans for rates. “As for VTB24 and the retail business of VTB Bank, there are no plans to adjust the yield on foreign currency deposits in the near future,” noted a representative of the VTB Group.

It will be more difficult for banks to follow the same path in relation to legal entities. “Good corporate clients are critical for most banks, and no one will refuse them due to losses on attracted euros. Banks will have to solve this problem by improving the functioning of their treasuries,” a manager at one of the banks included in the top 30 in terms of assets told RBC.

In his opinion, the problem did not appear yesterday, but with proper management of liquidity flows, it can be resolved. “Most likely, the association’s appeal to the Central Bank was caused by a surge in the influx of liquidity in euros from clients of some specific banks, which they quite reasonably supported with a reference to the general difficult situation on the market.”

It is possible, notes RBC’s interlocutor, that in recent months the situation has been aggravated by Russian companies accumulating foreign currency in their accounts, including euros, to pay external debts. In the first quarter of 2017, according to the Central Bank, these payments should amount to more than 15 billion in dollar equivalent.

The Bank of Japan introduced a negative interest rate on new deposits that Japanese banks place with the Central Bank. This measure should stimulate economic growth

Central Bank of Japan building (Photo: AP)

On January 29, the Bank of Japan announced that it was introducing a negative interest rate on excess reserves, namely new deposits that lending institutions place with the central bank. The rate, which is now 0.1%, will drop to -0.1%. Reducing the deposit rate to negative values ​​makes it unprofitable for banks to place funds in the accounts of the Central Bank - instead of receiving income, they are forced to pay the regulator. It is assumed that in this case the funds, instead of going to the accounts of the Central Bank, will be invested in the economy.

The negative rate will only apply to those reserves that the Bank of Japan accrues to commercial banks during new rounds of repurchases of securities from the financial sector. Already existing reserves, which The Financial Times estimates amount to $2.5 trillion, will continue to carry an interest rate of 0.1%. Bloomberg writes that the new rules will take effect on February 16.

The Central Bank will also buy government bonds, securities of real estate funds, as well as exchange-traded funds in order to expand the monetary base.

Simultaneously with the introduction of a negative interest rate for part of excess reserves, the Bank of Japan maintained its securities repurchase program. It reaches ¥80 trillion ($666 billion) per year. Aggressive monetary measures are designed to stimulate inflation. The Bank of Japan intends to bring it to 2% per year - a level considered optimal for developed countries. According to the organization's forecast, this goal is achievable by the period between March and October 2017. In December 2015, the annual inflation rate was 0.2%. Rising inflation, in turn, should stimulate growth in the economy, which in Japan has stagnated in recent years and has only recently begun to show signs of recovery.

According to updated data, in the third quarter of 2015, the country's GDP grew by 1% in annual terms. But industrial production, according to statistics from the Ministry of Economic Development of Japan, decreased by 1.4% in December.

The Bank of Japan's ultra-loose monetary policy is at odds with the actions of the US Federal Reserve. In mid-December last year, the Fed raised its key rate for the first time in nine years. Prior to this, the Fed abandoned large-scale interventions in the securities market. Thus, the policy of “quantitative easing” (low key rate and repurchase of securities), which had been in effect in the United States since 2009, was completed.