Posted on 03/20/2016 5:41:02 PM PDT by Lorianne
The world economy would be worse off without negative interest rates, according to International Monetary Fund Managing Director Christine Lagarde.
Negative rates in Europe and Japan have helped support global growth and price gains, she said in an interview in Ho Chi Minh City on Friday. The finance sector may need to implement new business models as a result, she said.
If we had not had those negative rates, we would be in a much worse place today, with inflation probably lower than where it is, with growth probably lower than where we have it, Lagarde said. It was a good thing to actually implement those negative rates under the current circumstances.
Central banks in Europe and Japan have deployed negative interest rates to stimulate the economy, and Federal Reserve Chair Janet Yellen said the U.S. central bank is taking a look at the tool in the event that we needed to add accommodation. The policy moves have triggered concerns that they could have unintentional consequences such as hurting bank profits.
Negative interest rates are a fairly new economic tool and more time is needed to assess the policy, Lagarde said.
China Growth So lets see whether it kick starts the process of fueling credit to the economy, changing the behavioral pattern of people and changing the strategy of banks as well, she said. It may be good for the economy maybe not forever, but for a period of time.
Separately, Lagarde said the IMF may raise its 6.3 percent growth forecast for China due to the nations planned economic reforms and stimulus. The figure could be raised a little more after an assessment of a recently announced economic package, she said.
(Excerpt) Read more at hellenicshippingnews.com ...
What is the point of a bank in negative rates? Might as well close shop.
Helped?!
....guess savers aren’t part of “ the economy.”
Christine Lagarde is nothing more than a blabbering over tanned old prune working her ass off to make the Soros’s of the world even richer.
The missing trillions are to pay off the virtual trillions in derivative bets that the banks and Wall Street have and are making. You pay with with costs for everything going up and up, job losses, losing everything.
They get big bonuses.
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