So let me get this straight, I have to PAY my bank to hold my money? Yes, you do. That is, if you live in Japan, Denmark, Sweden or Switzerland.
In a development few could have predicted, interest rates in many countries have recently turned negative. This means that rather than paying depositors for their savings, banks actually take money from depositors each month! Central banks in many countries have reduced interest rates into negative territory in an attempt to stimulate economies and to increase inflation. They want banks to lend more and people to spend rather than to save. The verdict is still out on whether or not negative interest rates will accomplish these results. What is not in doubt is that retirees, savers and the banks themselves are being punished by negative interest rates and that the use of cash in these countries is growing.
Cash is going out of style…or so some companies would have us believe. Indeed, cash may be out for many industries including technology groups and networks. But let’s be honest, who would benefit most from a mass consumer abandonment of traditional payments?
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