Sep 5, 2019

European bankers fight negative interest rates

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The end of money as we know it

Illustration: Aïda Amer/Axios

The basic principles of investment are being upended, perhaps irreversibly, as the world enters an era of ultra-low and even negative interest rates.

What's happening: American consumers have seen the interest rates they're paid on savings accounts, bonds and CDs tumble this year, and in places where central banks have actually set negative rates — like Japan and the eurozone — some consumers are actually being forced to pay in order to save money.

Go deeperArrowSep 10, 2019

European Central Bank launching stimulus program to shore up economy

Mario Draghi leaving an ECB press conference in July. (Photo: Arne Dedert/Picture Alliance via Getty Images)

The European Central Bank announced a series of measures Thursday in an effort to help worsening economic conditions and low inflation in the euro zone, including cutting interest rates by 10 basis points to negative 0.50% (signaling even lower rates may be coming) and re-starting its bond-buying program "as long as necessary."

Why it matters: This is one of the most contentious and important policy decisions for outgoing ECB president Mario Draghi, who is facing doubts from economists about the effects of moving rates further below zero. His successor is vowing to look at the “costs and benefits“ of negative rates, while others are critical that re-starting quantitative easing is too aggressive.

Keep ReadingArrowSep 12, 2019

ECB head Mario Draghi's time is running out

Illustration: Lazaro Gamio/Axios

Mario Draghi's penultimate policy meeting as European Central Bank president was a bit like watching a past-his-prime boxer struggling through the late rounds of a fight. "Dovish" Draghi still has the moves, but it's obvious the game has passed him by and a new era has begun.

Driving the news: Draghi, whose term is set to expire at the end of October, not only cut the ECB's already negative deposit rate to -0.5%, he also announced additional stimulus of 20 billion euros a month to continue indefinitely and lowered the central bank's inflation and growth forecasts.

Go deeperArrowSep 13, 2019