I know, looking at my title, I thought I wanted to popularize negative interest rates again. That's right, that's my plan. But the style is a bit crooked.
Why do you say that? Because I was chatting with my little sister today and somehow got involved in negative interest rates. Of course, I was the one who started the conversation, and unfortunately my little sister is a non-financial major and doesn't do transactions. so. . . . (The following uses A to replace me, and B is my little sister)
Part 1: Discussion of Negative Interest Rates
A: Do you know about negative interest rates?
B: I know, it is negative interest rate. For example, if you owe me money, it becomes I owe you money, right?
A:. . . . . (Silence for three seconds) No. For example, if you ask the bank to borrow money, you have to pay the bank interest, right? Now the bank pays you interest, which is negative interest rate. But you still owe the bank money. The debt relationship remains unchanged, and you will still have to repay the money in the end. so. . . . (interrupted)
B: The bank pays me interest? Isn't that great?
A: Yes, it is very good.
B: So where is it (negative interest rate) used?
A: Negative interest rate is a kind of monetary policy or economic policy that is very controversial now. There are two types of negative interest rates. The first is called negative asset interest rates. second. . . . (interrupted)
B: Oh~~~~ (read the second tone please)
A: Don't, I know you don't know anything.
B: I know. . .
A: So what do you mean by negative interest rates on assets?
B: Me. . . I don't know, but I know it's assets (laughter) negative interest rates.
A: Good. . . The second year is debt with negative interest rate.
B: Oh~~~~~~ (read the second tone please)
A: Don't (interrupted again)
B: I really know. Assets are the money I own and liabilities are the money I owe to others.
A:. . . . . . . . Can ~ ~ to. Policies such as negative interest rates on assets are rarely used now, and most of them use negative interest rates on liabilities. What is a negative interest rate on debt? The money you keep in the bank is the bank's liability to you, that is, the money the bank owes you, understand?
B: I understand.
A: So the money that the bank deposits in the central bank is the money that the central bank owes the bank, right? Conversely, the central bank's liabilities are bank deposits, can you understand?
B: I can understand.
A: OK, the so-called negative interest rate on debt is from the perspective of the central bank. That is, the negative interest rate on the central bank's debt. What's the meaning? That is, if the bank deposits money in the central bank, the central bank will deduct the bank's money. This shows that the central bank wants the bank. . . (interrupted)
B: Deposit the money with him.
A: Raise your hand and make a chestnut. Of course, I hope the bank will lend the money out.
B: Wait. . . . I don't understand. It means that the bank deposits the money with the central bank, and the central bank still deducts the money. Banks not only save money without interest, but also give money to the central bank.
A: Yes. This is debt with a negative interest rate. To put it simply, if the bank does not lend money, the central bank will fine it. Do you think it is reasonable?
B: Does it have to be done in such a complicated way?
A: How should it be done?
B: It is to encourage banks to lend money. If you lend money, I will reward you with something.
A: Hey~~ In fact, there is an adjustment to the negative interest rate policy. The negative interest rate we just mentioned is punitive, right? Now one of the ideas of the central bank is what you mentioned. When the bank lends out money, it rewards the bank. How to reward? The central bank's loan is the central bank's asset, because it can make money through the loan, so if the central bank lends money to the bank, it is the bank's liability, right? This is actually the central bank's negative interest rate on assets.
What's the meaning? That is, the central bank lends money to banks at negative interest rates. In other words, the bank received a loan with a negative interest rate. Therefore, the central bank's attitude towards negative interest rates is gradually shifting from negative interest rates on liabilities to negative interest rates on assets. In the past, the central bank forced banks to lend, but it turned out that the effect was not good. Now it is considered to first give the bank a loan with a negative interest rate, so that the bank can lend money to those in need at a relatively low interest rate, and then stimulate the economy. Do you think it is reasonable?
B: I think it's quite reasonable. How unwilling are banks to lend money, and let the central bank worry about it like this.
Part 2: The root cause of the failure of negative interest rates
A: Hahaha, yes, in fact, you also mentioned a problem here. Loan relationship, it is a two-way relationship. You just said how unwilling banks are to lend money. But have you ever thought about it, in fact, the bank is unwilling to borrow money, not because the bank is unwilling to borrow money, but because we are unwilling to borrow money. For example, should I lend you money?
B: I want it~~ I don’t have to pay it back.
A:. . . . . . . . That's why banks don't want to lend money, you know? Now the entire financial system. . . (interrupted)
B: There are too many rogues, right?
In the forehead. . . . . .
A: Let’s not talk about the usage. For example, I lent you a sum of money, what would you use it for?
B: Play and spend it.
A: Aha~~Yes. . . This is. . . ...￥&*...*&()%￥
Looking up to the sky and sighing~~
The goal of our so-called monetary policy is to lend money to companies or individuals, and they use it for investment, such as production and research and development. . . (temporarily stuck)
B: Financial management and the like?
A: You are wrong again. Financial management is a financial investment project, which is equivalent to investing in the financial market. (interrupted)
B: In short, I am not going in the direction you want me to go.
A: Yes. Originally, the central bank hoped that through a loose monetary policy, everyone would get the money and invest in the real economy, such as you. . .
B: How is it possible. Definitely play with it.
I can't laugh or cry. . . .
A: The central bank hopes that companies or individuals will invest in industries and expand production after receiving the money, but in the end they will become people like you, who use it to speculate in financial assets, and money makes money. This is the first category. The second category is consumption.
B: Yes, of course, first buy something you like.
A: But have you ever thought that if you spend the money, there will be problems with your reimbursement.
B: I haven't thought about it. I just want to spend money. Spend it first.
Hold the forehead again. . . .
A: If you have wine today, you will be drunk today, right? You are thinking about this very short-term. Are you willing to make a 20-year industrial investment?
B: No, I only want to do it for two hours.
silent. . . .
A: Yes, so our monetary policy is actually problematic. Negative interest rate policy is a good idea to encourage banks to lend, right? The lenders are all the general public. Out of 100 people, maybe 90 people think so.
B: 99.
A: Money makes money and then spends it.
B: Yes~!
A: So in the end, if you spend it, it is actually easy to turn it into a bad debt, right? Because you can't afford to pay back the money at all. If you don't invest, there will be no return on investment. How can you pay back the money?
B: Work~~! (natural tone)
A: If you want to do this, then the purpose of the whole policy is wrong.
B: I don't care what your purpose is, I can do whatever I want.
I can't laugh or cry, I feel like I can't talk anymore. . . . I think if we keep talking, all economic theory will collapse.
B: I think it has something to do with psychology. How can they calculate accurately, what will others do with this money? Always do some research, right? It's not that you want him to be whatever you want him to be.
A: Yes, so I think economists are actually not very smart.
END. . . .
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