Free Republic
Browse · Search
General/Chat
Topics · Post Article

Skip to comments.

How negative interest rates helped turn Deutsche Bank into a disaster
CNN Business ^ | 07/29/19 | Matt Egan

Posted on 07/29/2019 9:04:23 AM PDT by Moonman62

Germany's biggest lender is rapidly slashing jobs, it's losing a ton of money and the stock is trading near all-time lows.

Many of Deutsche Bank's problems are self-inflicted. It's been badly mismanaged. Deutsche Bank (DB) never fully cleaned up its crisis-era balance sheet. Restructuring efforts fell short. And its countless legal black eyes haven't helped matters.

But Deutsche Bank's struggles have also been amplified by something the 149-year-old lender never imagined, mostly because it had never happened before in modern history: negative interest rates.

In 2014, the European Central Bank wanted to boost the sluggish economy but interest rates were already at zero. The unconventional decision to take them into negative territory was aimed at encouraging growth and avoiding deflation, but it meant banks were charged a fee for parking their reserves with the central bank.

(Excerpt) Read more at cnn.com ...


TOPICS: Business/Economy; Chit/Chat
KEYWORDS: banking; banks; business; debt; deficits; europe; finance; taxes; thefed
Can somebody please explain why they didn't cut taxes to stimulate their economy rather than do something crazy like negative interest rates?
1 posted on 07/29/2019 9:04:23 AM PDT by Moonman62
[ Post Reply | Private Reply | View Replies]

To: Moonman62

“...The unconventional decision to take them into negative territory was aimed at encouraging growth and avoiding deflation, but it meant banks were charged a fee for parking their reserves with the central bank....”
****************************************************************
The banks would have been better off just keeping their required reserves in the form of actual cash sitting “unused”, but safe, in their vaults. Of course, the German government likely wouldn’t allow that rational strategy.


2 posted on 07/29/2019 9:09:59 AM PDT by House Atreides (Boycott the NFL 100% — PERMANENTLY)
[ Post Reply | Private Reply | To 1 | View Replies]

To: Moonman62

I guess that’s one way to get rid of a central bank.


3 posted on 07/29/2019 9:12:19 AM PDT by Sirius Lee (“They are openly planning to murder you. Have a plan to prevent that.”)
[ Post Reply | Private Reply | To 1 | View Replies]

To: Moonman62
Can somebody please explain why they didn't cut taxes to stimulate their economy rather than do something crazy like negative interest rates?

Somebody has to support the moslem hordes, 85% of whom are unemployable.

4 posted on 07/29/2019 9:19:26 AM PDT by AlaskaErik
[ Post Reply | Private Reply | To 1 | View Replies]

To: All

Maybe now is a good time to buy some of their stock. The symbol is DB.

I’m gonna talk to my broker and see how he feels about it.


5 posted on 07/29/2019 9:20:56 AM PDT by MplsSteve
[ Post Reply | Private Reply | To 1 | View Replies]

To: Sirius Lee
I guess that’s one way to get rid of a central bank.

Deutsche Bank is no more Germany's central bank than Bank of America is the U.S. central bank. The central bank of German is Deutsche Bundesbank.

6 posted on 07/29/2019 9:26:15 AM PDT by DoodleDawg
[ Post Reply | Private Reply | To 3 | View Replies]

To: Moonman62

It would appear that they stopped being CAPITALIST and became SOCIALIST.

A Capitalist is interested in making a profit.

A Socialist is interested in “sharing the wealth”

Capitalism will grow the pie.

Socialist will eat the pie, lick the plate and then demand more pie.


7 posted on 07/29/2019 9:27:21 AM PDT by CIB-173RDABN (I am not an expert in anything, and my opinion is just that, an opinion. I may be wrong.)
[ Post Reply | Private Reply | To 1 | View Replies]

To: DoodleDawg
And Deutsche Bundesbank is NOT happy with Deutsche Bank, either.
8 posted on 07/29/2019 9:27:21 AM PDT by RayChuang88 (FairTax: America's Economic Cure)
[ Post Reply | Private Reply | To 6 | View Replies]

To: RayChuang88
And Deutsche Bundesbank is NOT happy with Deutsche Bank, either.

Yes, Buba is not amused.

9 posted on 07/29/2019 9:38:14 AM PDT by DoodleDawg
[ Post Reply | Private Reply | To 8 | View Replies]

To: Moonman62

I drove past their Jacksonville, FL office yesterday. Had a good laugh at seeing their flag flying below the US flag.


10 posted on 07/29/2019 9:39:27 AM PDT by lodi90
[ Post Reply | Private Reply | To 1 | View Replies]

To: Moonman62

I think all tax rates should be adjusted to negative numbers.


11 posted on 07/29/2019 9:39:43 AM PDT by I want the USA back (The further a society drifts from the truth, the more it will hate those who speak it. Orwell.)
[ Post Reply | Private Reply | To 1 | View Replies]

To: Moonman62

Borrow $10,000, and a year later, pay back $9800.


12 posted on 07/29/2019 10:46:20 AM PDT by Fido969 (In!)
[ Post Reply | Private Reply | To 1 | View Replies]

To: Moonman62

The government will pay our way out of it! Government has unlimited money! Just print more! What could possibly go wrong??


13 posted on 07/29/2019 10:48:05 AM PDT by Teacher317 (We have now sunk to a depth at which restatement of the obvious is the first duty of intelligent men)
[ Post Reply | Private Reply | To 1 | View Replies]

To: MplsSteve
Maybe now is a good time to buy some of their stock. The symbol is DB. I’m gonna talk to my broker and see how he feels about it.

On any given day in the last twelve years, I've had the same thought: "Maybe the bottom has been finally reached." But then, I waited an extra day. Sure enough...

Regards,

14 posted on 07/29/2019 10:55:39 AM PDT by alexander_busek (Extraordinary claims require extraordinary evidence.)
[ Post Reply | Private Reply | To 5 | View Replies]

To: Moonman62
Can somebody please explain why they didn't cut taxes to stimulate their economy

Then they'd have to admit that lower taxes are better.

15 posted on 07/29/2019 12:28:38 PM PDT by Toddsterpatriot (TANSTAAFL)
[ Post Reply | Private Reply | To 1 | View Replies]

To: MplsSteve

“Maybe now is a good time to buy some of their stock. The symbol is DB. I’m gonna talk to my broker and see how he feels about it.”

If DB goes bankrupt, their stock becomes literally worthless ...


16 posted on 07/29/2019 4:35:35 PM PDT by catnipman (Cat Nipman: Vote Republican in 2012 and only be called racist one more time!)
[ Post Reply | Private Reply | To 5 | View Replies]

To: House Atreides
“This increase in vault cash has, however, remained limited,” the ECB said. “Logistical constraints such as storage capacities or maximum amounts covered by insurance are the most likely limitations on (banks’) holding larger amounts of cash.”

German banks hoarding more cash, ECB says

17 posted on 08/03/2019 10:53:30 AM PDT by Toddsterpatriot (TANSTAAFL)
[ Post Reply | Private Reply | To 2 | View Replies]

To: All

Coming soon to a country near you.

https://www.bloomberg.com/quote/USGG10YR:IND


18 posted on 08/07/2019 5:07:01 AM PDT by Drago
[ Post Reply | Private Reply | To 1 | View Replies]

Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.

Free Republic
Browse · Search
General/Chat
Topics · Post Article

FreeRepublic, LLC, PO BOX 9771, FRESNO, CA 93794
FreeRepublic.com is powered by software copyright 2000-2008 John Robinson