ECB slashes interest rate to 0.15%
Source: BBC
The European Central Bank (ECB) has lowered its benchmark interest rate to 0.15% from 0.25% in an effort to stimulate economic growth and avoid deflation in the eurozone.
It has also reduced its deposit rate below zero, to -0.1%, which means commercial banks will have to pay to lodge their money with the central bank, rather than receive interest.
The idea is to incentivise the banks to lend to businesses, thereby stimulating growth.
The ECB is the first of the "Big Four" central banks (the ECB, The US Federal Reserve, The Bank of Japan and the Bank of England) to do this.
Read more: http://www.bbc.co.uk/news/business-27717594
MannyGoldstein
(34,589 posts)Nye Bevan
(25,406 posts)instead of being paid to do so?
Psephos
(8,032 posts)fasttense
(17,301 posts)Maybe it's time to change to a new type of economy? Feudalism and slavery also created messes like this.
Negative interest rates, huge unemployment, deflation, inflation, overpriced commodities causing famine, oil corporations destroying the earth with carbon, pretend democracies bought off by the wealthy, it just gets worse and worse.
melm00se
(4,972 posts)fasttense
(17,301 posts)No absentee stock holders or boards are allowed to run a business. Only workers who work at the factory can own it.
Co-ops with the workers owning the means of production. The rich will have to use their money to buy up other crap. Or just not allow the uber rich to accumulate in excess of a million dollars.
Nye Bevan
(25,406 posts)and generous social benefits.
What non-capitalist country would you hold up as a model?
TygrBright
(20,733 posts)Nye Bevan
(25,406 posts)and conversely, lowering interest rates to stimulate an economy?
TygrBright
(20,733 posts)...inflation and deflation, which are merely descriptions of value fluctuation.
It may well be that a touch of inflation-- particularly on the wages end-- could stimulate the economy. Or not.
However, LOWERING interest rates is definitely (last time I looked ) a DEFLATIONARY strategy. This, too, may stimulate the economy. Or not.
But I don't think that lowering interest rates will "avoid deflation."
confusedly,
Bright