Why do banks “park” their money at the European Central Bank?How do reserve banks influence home-loan interest rates?Savings account with fixed interest or not?European banks, low interest rates and “free money” for home owners?
Why is Boris Johnson visiting only Paris & Berlin if every member of the EU needs to agree on a withdrawal deal?
Singleton Design Pattern implementation in a not traditional way
How to find multiple values on the same line in any permutation using Notepad++?
how do you harvest carrots in creative mode
Does norwegian.no airline overbook flights?
Cross-referencing enumerate item
Mathematical uses of string theory
I have a player who yells
Was there ever a treaty between 2 entities with significantly different translations to the detriment of one party?
Non-visual Computers - thoughts?
Why is my Earth simulation slower than the reality?
Is it safe to remove the bottom chords of a series of garage roof trusses?
Sun setting in East!
Why in most German places is the church the tallest building?
Is “I am getting married with my sister” ambiguous?
Does travel insurance for short flight delays exist?
Prove your innocence
LeetCode: Pascal's Triangle C#
Is "The life is beautiful" incorrect or just very non-idiomatic?
Using `With[...]` with a list specification as a variable
Fancy String Replace
I got kicked out from graduate school in the past. How do I include this on my CV?
See details of old sessions
Irish Snap: Variant Rules
Why do banks “park” their money at the European Central Bank?
How do reserve banks influence home-loan interest rates?Savings account with fixed interest or not?European banks, low interest rates and “free money” for home owners?
.everyoneloves__top-leaderboard:empty,.everyoneloves__mid-leaderboard:empty,.everyoneloves__bot-mid-leaderboard:empty margin-bottom:0;
I regularly read that the European Central Bank charges a negative interest rate on money that banks park there. But why would a bank put their money to the Central Bank then? Can't they just keep it in their own bank and not have to pay that negative interest?
central-bank
asked 8 hours ago
Martin UedingMartin Ueding
1313 bronze badges
add a comment |
I regularly read that the European Central Bank charges a negative interest rate on money that banks park there. But why would a bank put their money to the Central Bank then? Can't they just keep it in their own bank and not have to pay that negative interest?
central-bank
asked 8 hours ago
Martin UedingMartin Ueding
1313 bronze badges
add a comment |
I regularly read that the European Central Bank charges a negative interest rate on money that banks park there. But why would a bank put their money to the Central Bank then? Can't they just keep it in their own bank and not have to pay that negative interest?
central-bank
asked 8 hours ago
Martin UedingMartin Ueding
1313 bronze badges
I regularly read that the European Central Bank charges a negative interest rate on money that banks park there. But why would a bank put their money to the Central Bank then? Can't they just keep it in their own bank and not have to pay that negative interest?
central-bank
central-bank
asked 8 hours ago
Martin UedingMartin Ueding
1313 bronze badges
asked 8 hours ago
Martin UedingMartin Ueding
1313 bronze badges
asked 8 hours ago
Martin UedingMartin Ueding
1313 bronze badges
asked 8 hours ago
Martin UedingMartin Ueding
1313 bronze badges
asked 8 hours ago
Martin UedingMartin Ueding
1313 bronze badges
1313 bronze badges
add a comment |
add a comment |
1 Answer
1
active
oldest
votes
Banks are obligated to keep cash in the central bank following reserve requirements.
The reserve requirement (or cash reserve ratio) is a central bank
regulation employed by most, but not all, of the world's central
banks, that sets the minimum amount of reserves that must be held by a
commercial bank. The minimum reserve is generally determined by the
central bank to be no less than a specified percentage of the amount
of deposit liabilities the commercial bank owes to its customers.
[...]
...the higher the reserve requirement is set, the less funds banks will have available to lend out
When central bank wants to fight deflation, it will set negative interest rate, thus decreasing amount of money banks have.
In a sense, "negative interest rate" is a tax on the banks, but instead of going to the government, tax goes to central bank (taken out of circulation), which decreases total cash in the economy.
I don't understand in which conditions banks would keep more money than required by reserve requirement while paying fee for that (see Negative interest on excess reserves
)
answered 7 hours ago
aaaaaaaaaaaa
2035 bronze badges
add a comment |
1 Answer
1
active
oldest
votes
1 Answer
1
active
oldest
votes
active
oldest
votes
active
oldest
votes
Banks are obligated to keep cash in the central bank following reserve requirements.
The reserve requirement (or cash reserve ratio) is a central bank
regulation employed by most, but not all, of the world's central
banks, that sets the minimum amount of reserves that must be held by a
commercial bank. The minimum reserve is generally determined by the
central bank to be no less than a specified percentage of the amount
of deposit liabilities the commercial bank owes to its customers.
[...]
...the higher the reserve requirement is set, the less funds banks will have available to lend out
When central bank wants to fight deflation, it will set negative interest rate, thus decreasing amount of money banks have.
In a sense, "negative interest rate" is a tax on the banks, but instead of going to the government, tax goes to central bank (taken out of circulation), which decreases total cash in the economy.
I don't understand in which conditions banks would keep more money than required by reserve requirement while paying fee for that (see Negative interest on excess reserves
)
answered 7 hours ago
aaaaaaaaaaaa
2035 bronze badges
add a comment |
Banks are obligated to keep cash in the central bank following reserve requirements.
The reserve requirement (or cash reserve ratio) is a central bank
regulation employed by most, but not all, of the world's central
banks, that sets the minimum amount of reserves that must be held by a
commercial bank. The minimum reserve is generally determined by the
central bank to be no less than a specified percentage of the amount
of deposit liabilities the commercial bank owes to its customers.
[...]
...the higher the reserve requirement is set, the less funds banks will have available to lend out
When central bank wants to fight deflation, it will set negative interest rate, thus decreasing amount of money banks have.
In a sense, "negative interest rate" is a tax on the banks, but instead of going to the government, tax goes to central bank (taken out of circulation), which decreases total cash in the economy.
I don't understand in which conditions banks would keep more money than required by reserve requirement while paying fee for that (see Negative interest on excess reserves
)
answered 7 hours ago
aaaaaaaaaaaa
2035 bronze badges
add a comment |
Banks are obligated to keep cash in the central bank following reserve requirements.
The reserve requirement (or cash reserve ratio) is a central bank
regulation employed by most, but not all, of the world's central
banks, that sets the minimum amount of reserves that must be held by a
commercial bank. The minimum reserve is generally determined by the
central bank to be no less than a specified percentage of the amount
of deposit liabilities the commercial bank owes to its customers.
[...]
...the higher the reserve requirement is set, the less funds banks will have available to lend out
When central bank wants to fight deflation, it will set negative interest rate, thus decreasing amount of money banks have.
In a sense, "negative interest rate" is a tax on the banks, but instead of going to the government, tax goes to central bank (taken out of circulation), which decreases total cash in the economy.
I don't understand in which conditions banks would keep more money than required by reserve requirement while paying fee for that (see Negative interest on excess reserves
)
answered 7 hours ago
aaaaaaaaaaaa
2035 bronze badges
Banks are obligated to keep cash in the central bank following reserve requirements.
The reserve requirement (or cash reserve ratio) is a central bank
regulation employed by most, but not all, of the world's central
banks, that sets the minimum amount of reserves that must be held by a
commercial bank. The minimum reserve is generally determined by the
central bank to be no less than a specified percentage of the amount
of deposit liabilities the commercial bank owes to its customers.
[...]
...the higher the reserve requirement is set, the less funds banks will have available to lend out
When central bank wants to fight deflation, it will set negative interest rate, thus decreasing amount of money banks have.
In a sense, "negative interest rate" is a tax on the banks, but instead of going to the government, tax goes to central bank (taken out of circulation), which decreases total cash in the economy.
I don't understand in which conditions banks would keep more money than required by reserve requirement while paying fee for that (see Negative interest on excess reserves
)
answered 7 hours ago
aaaaaaaaaaaa
2035 bronze badges
edited 7 hours ago
answered 7 hours ago
aaaaaaaaaaaa
2035 bronze badges
answered 7 hours ago
aaaaaaaaaaaa
2035 bronze badges
answered 7 hours ago
aaaaaaaaaaaa
2035 bronze badges
2035 bronze badges
add a comment |
add a comment |
