Provided that governments won't ban cash by then or impose daily/weekly/monthly withdrawal caps.
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How will banks survive deep NIRP?
- Thread starter babyjake1961
- Start date
What makes you think banks will have a problem with "deep NIRP"?
Why would depositors choose to effectively get taxed on their savings via NIRP as opposed to withdrawing their cash and putting it somewhere else?What makes you think banks will have a problem with "deep NIRP"?
Somewhere else where is the question... Especially where institutional, rather than retail depositors, are concerned.
They'll easily inflate some more tangible asset bubbles: the pet rock, real estate yet again, land of which "there's only so much left", the IT stock bubble etc, as has always been throughout human history. Inflating them will take at least some time while banks will face the immediate NIRP aftermath. How will they manage to stay afloat in it?Somewhere else where is the question... Especially where institutional, rather than retail depositors, are concerned.
Well, I dunno about what they will inflate... One thing I do know is that the empirical evidence suggests that banks will do just fine.
Why did their shares plunge by anywhere from 25 to 40 percent in the first weeks of this year on the NIRP rumors?Well, I dunno about what they will inflate... One thing I do know is that the empirical evidence suggests that banks will do just fine.
As many times throughout history there will be a re-set of some kind. It may be a long time still but it will happen. It all revolves around confidence.
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Well, firstly, the mkt overreacted, in my opinion. Secondly, I actually don't think it happened because of the threat of NIRP. The sovereign wealth fund community has been overweight financials and was selling.Why did their shares plunge by anywhere from 25 to 40 percent in the first weeks of this year on the NIRP rumors?
no kidding. under frank-dodd there is a bail-in provision a la cypriot banks. banks will take big risks because depositor's money will be confiscated in case of bank insolvency, in order to recapitalize them. hard to believe, it will be done at the depositor's expense and not at the taxpayer's expense.Well, I dunno about what they will inflate... One thing I do know is that the empirical evidence suggests that banks will do just fine.
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