Global central banks are making investors pay to stash their money. An investment chief overseeing $4.5 billion explains why that would be a disaster for the US.

, a $4.5 billion wealth-management firm, negative rates couldn't be further from normal. And he thinks their implementation in the US could upend the financial system as we know it today.

The Bank of Japan and the European Central Bank have pegged interest rates at or below zero for years now, and their economies are barely treading water. In fact, in the second quarter of 2019, the eurozone and Japan posted paltry gross-domestic-product growth of 0.2% and 0.3%. Under normal, positive-rate circumstances, lenders earn interest when they stash excess capital at the central bank. But under a negative-rate policy, the opposite is true. They're actually charged for having an extra layer of security.

"You're killing your banks," he said."And if you kill your banks, then you're destroying the transition mechanism of monetary policy, and you basically cut off a profitable way of loaning money to business."

Malaysia Malaysia Latest News, Malaysia Malaysia Headlines

Similar News:You can also read news stories similar to this one that we have collected from other news sources.

Action! Nigeria's film industry draws global entertainment brands'Oya!' shouts the director in Nigerian Pidgin English. Actors take the... Love you 🌹 DannyLion5 Pity they can’t feed their people and get rid of their massive corruption
Source: Reuters - 🏆 2. / 97 Read more »

Global stocks are dropping after Chinese factory prices fall, stoking fears deflation is spreadingChinese factories face weaker demand and may be 'exporting deflation by cutting prices and making it even harder for central banks' like the ECB.
Source: BusinessInsider - 🏆 729. / 51 Read more »