Why won’t people simply pull their money from the bank if the interest rate goes negative?
ask the people of Cyprus what happens when government/bankers change the bank rules and don’t want you to pull your money out of the banks
> “Why won’t people simply pull their money from the bank if the interest rate goes negative?”
Because the banks won’t let them. They will put a very low limit on how much you can draw out each day (say $50 or $100 per day). That has happened recently in several other countries and happened in the US during the Great Depression.
The reason they do that is to keep money in the banks until the government decides how much of it they want to keep.
US money was devalued during the “Bank Holiday” the US had in the depression. Everything was worth less than before. More recently, the government in Cyprus was more direct. The government just took a certain percentage of the money in all the banks in Cyprus and kept it. Anyone with more than some amount (I think it was 85,000 or 100,000 euros) lost everything over that amount. The people who had less than that did not get away whole. They lost some (but not as much).