This, of course, not only for us, but for the population of all countries in the world is probably surprising. Imagine, you take a large amount of money from the bank for a short period, and return less than you took.
Do you think this is probably a fairy tale? But no. There is such a country on the planet …
Swiss banks began to provide loans at a negative rate, which became possible due to the super-soft policy of the country's Central Bank. In particular, we are talking about Zuger Kantonalbank and Grisons cantonal bank (GKB).
At present, the base interest rate of the Swiss National Bank is kept at a negative level of minus 0.75% per annum. It is on these conditions that the regulator accepts deposits from the country's credit institutions, and they are forced to pay extra to the Central Bank for storing excess funds, Lenta.ru reports.
As the representative of Zuger Kantonalbank told, "in some cases" the financial organization issues "short-term loans at zero or negative rates for institutional clients (other banks, insurance companies, etc. - ed.)". Another financial organization explained that they provide such loans to those who take a large amount for a short time, RBC notes.
Thus, borrowers benefit from the loans received and are obliged to repay less than they took out.
However, according to Bloomberg, rates in the banks of the cantons of Zurich, Geneva and Bern are still above zero. The Swiss Central Bank has maintained a negative interest rate for several years. At the same time, the value of the Swiss franc remains high and inflation remains low.
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In Denmark, the National Bank introduced a negative interest rate for the first time in 2012 to maintain its currency. In 2016, The Wall Street Journal wrote that the Dane, instead of paying interest on a loan taken 11 years ago, received $ 38 from the bank in the last quarter due to a negative interest rate on the loan. Realkredit Danmark, the country's largest mortgage lender, had 758 borrowers with negative mortgage rates a year earlier, according to Realkredit Danmark. The publication indicated that the negative side of this situation is that banks do not pay interest on most deposits, so citizens are investing in real estate. However, as the newspaper noted, in case of excessive growth of investments in the real estate market, the country could face a financial crisis.
And in this regard, I have a question: why not just take money and give less in order to earn. You can take and give less every day. How do you like this business?