Negative interest rates

ProDave

if banks start charging negative rates then I predict a run on the banks as we all withdraw it in cash, and a boom in the sale of home safes.

DiggerUK

Thrugelmir said:

2 year Government Gilts went into negative yield this morning. Appears as if dark days are being priced in. 

Is this the yield on existing bonds, or currently being issued?

There seems to be no green shoots of recovery, just lots of red flags flying.
For the first time ever Gold is at £1400.00 an ounce (for a whole day now)  in USD it is still behind its all time high of $1900.00, but only by $200.00.

The BOE grave its dire warnings of GDP for rest of this year,  many in business now claiming many on furlough may have no job to go back to, more businesses have cancelled dividend payments than are paying them and more businesses are closed for the foreseeable future than open.

From were I am sitting, negative interest rates will likely be the least of anybodies worries..._

grumiofoundation

DiggerUK said:

Thrugelmir said:

2 year Government Gilts went into negative yield this morning. Appears as if dark days are being priced in. 

Is this the yield on existing bonds, or currently being issued?

There seems to be no green shoots of recovery, just lots of red flags flying.
For the first time ever Gold is at £1400.00 an ounce (for a whole day now)  in USD it is still behind its all time high of $1900.00, but only by $200.00.

The BOE grave its dire warnings of GDP for rest of this year,  many in business now claiming many on furlough may have no job to go back to, more businesses have cancelled dividend payments than are paying them and more businesses are closed for the foreseeable future than open.

From were I am sitting, negative interest rates will likely be the least of anybodies worries..._

Who had post 12?

DiggerUK

grumiofoundation said:

DiggerUK said:

Thrugelmir said:

2 year Government Gilts went into negative yield this morning. Appears as if dark days are being priced in. 

Is this the yield on existing bonds, or currently being issued?

There seems to be no green shoots of recovery, just lots of red flags flying.
For the first time ever Gold is at £1400.00 an ounce (for a whole day now)  in USD it is still behind its all time high of $1900.00, but only by $200.00.

The BOE grave its dire warnings of GDP for rest of this year,  many in business now claiming many on furlough may have no job to go back to, more businesses have cancelled dividend payments than are paying them and more businesses are closed for the foreseeable future than open.

From were I am sitting, negative interest rates will likely be the least of anybodies worries..._

Who had post 12?

'The Special One'..._

Tarian

caveman38 said:

I mean can an institution renege on the T&C of a FR Bond. I mean if the interest rate on a 5 yr. bond was say 3% and the institution started to struggle where to offset that money elsewhere because of base rate at 0%. Could they change the rate you agreed to when opening the account?

No. Not if it was genuinely Fixed Rate.

You shouldn't worry about the Bank's ability to lend out the same money at a Fixed Rate. They will have done so already .... and those Borrowers will face "break costs", if they insist on repaying early.

(I used to do that sort of thing for a living. i.e. raise millions at a fixed rate on behalf of the the Lending departments. They told us how much lending they expected. We got "paid" to manage any imbalance between the total amount in versus the total amount out. Win some. Lose some !)

Audaxer

Mr.Saver said:

The place is not necessarily a savings account or current account, it could be anything, such as the cash holding on an investment platform.

That's true, however if we do get negative interest rates, I wonder whether some investment platforms would start charging their percentage platform/custody fees on the whole value of your portfolio including any cash held?

NorthernJoe

ProDave said:

if banks start charging negative rates then I predict a run on the banks as we all withdraw it in cash, and a boom in the sale of home safes.

Even with marginally negative rates, it will still be cheaper to keep cash in the bank than insure cash at home 

ColdIron

Audaxer said:

Mr.Saver said:

The place is not necessarily a savings account or current account, it could be anything, such as the cash holding on an investment platform.

That's true, however if we do get negative interest rates, I wonder whether some investment platforms would start charging their percentage platform/custody fees on the whole value of your portfolio including any cash held?

Some already do, e.g Vanguard Investor

Malkytheheed

DiggerUK said:

Thrugelmir said:

2 year Government Gilts went into negative yield this morning. Appears as if dark days are being priced in. 

Is this the yield on existing bonds, or currently being issued?

There seems to be no green shoots of recovery, just lots of red flags flying.
For the first time ever Gold is at £1400.00 an ounce (for a whole day now)  in USD it is still behind its all time high of $1900.00, but only by $200.00.

The BOE grave its dire warnings of GDP for rest of this year,  many in business now claiming many on furlough may have no job to go back to, more businesses have cancelled dividend payments than are paying them and more businesses are closed for the foreseeable future than open.

From were I am sitting, negative interest rates will likely be the least of anybodies worries..._

Try and not be too positive. Don't want to get people hopes up too much eh. 👍🙄

DiggerUK

It isn't me making loud headlines for the sake of it. Listen to the Chancellor..._

https://www.bbc.co.uk/news/business-52719230