IMF warns Japan against deepening negative interest rates

By Leika Kihara

The requested article has expired, and is no longer available. Any related articles, and user comments are shown below.

© Thomson Reuters 2020.

©2021 GPlusMedia Inc.

Login to comment

What this means for the average Joe and Jill, is that your bank will start charging you money to leave your money at their bank to "play with"! Let that ping-pong around in your mind. Switzerland did the same thing a few months ago, and the rich said a big F this and have withdrawn their entire savings and put it into safes. So, I expect the same thing in Japan. This stupid government needs more creative ideas in raising revenue. I remember back in the 90s, during the Korean economic collapse, the government had certain retailers attach codes on the items that they were selling, and if you bought the right item with the right code, you won a refrigerator or TV. It spurred sales, and the coded items sold for a few pennies more but the campaign raised a LOT of money for a cash strapped government. But such ideas will never happen here.

3 ( +3 / -0 )

I don’t leave money in my bank as I am not receiving any benefit-It sits in a strong safe!

0 ( +1 / -1 )

Money in the bank is insured. Money kept a home isn't and if the house burns down, what then.

3 ( +4 / -1 )

The negative rate is charged on the accounts that commercial banks hold at the BOJ, not on our accounts. I doubt that our banks will be charging us a minus rate, as that could trigger a run on the banks, and what a mess that would be, especially for the banks.

The IMF has long called on Japan to raise taxes. Well, once again it has had to admit it gave out the wrong advice. Gotta love its credibility!

7 ( +8 / -1 )

My safe is fireproof 100%

-2 ( +0 / -2 )

From what I remember, a negative interest rate in the banker's world means that their money if left in the government's reserve bank and not used and loan out to the public, those funds will be charged an interest. I does not apply to the money in regular banks deposited by the public. It is usually a way to force the banks to circulate the money to boost and stimulate economic activity, especially when there is a slowing of growth.

IMF is a consortium of major banks, the FedResv and major financiers as well as countries, that loans money to countries in need and their interest is to have continuous growth so that they can continue to collect on those loans and make more loans. Their interest is in econiomic growth and often in disasters, because they can loan out more money, thereby obligating countries and major organizations such as UN and UE and WHO, with debts. But it is not a good thing for them to have a recession when there is no economic activity to keep feeding their coffers. So they look for controlling the economy by further loans even at zero interest rates obligating countries to repay their loans under their terms or comply with their economic strategies for growth under their terms and conditions.

1 ( +1 / -0 )

There is a limit to reducing rates at the government level to adjust and control the flow of money and use of money to keep the economy from stagnating. The use of negative rate is to force the banks to use the money and put it into the hands of the public.

That is why Trump has a difficult time with the Feds. The Fed Resv is a consortium of individuals that own banks that has the legal contract with the US government to print and standardize the dollar. The President does not control the interest rates.

In effect even the Congress cannot control interest rates or even the amount of fiat currency Dollar is printed and released into the money stream, even if they wanted to. Unlike Japan, the US governemnt just let a private entity run the money supply. In Japan as in other countries, the government actiually controls and print the currency. So in time of disaters such as this they can take the action to go to negative interest rates and force the banks to keep their non-required reserve money out and allow the public to access it. Sadly many banks just keep it in their so called vaults (or digital credit) and play it safe for themselves even if they have no interest income by making loans.

The US by mandate now requires banks to make loans during the pandemic but that is with taxpayer money that the banks received from the US treasury and the Fed Resv. Now the US gov owes the money in what we call "deficit" to the Fed Resv and to entities like the IMF and Japan and China.

0 ( +0 / -0 )

 also said Japan should boost fiscal spending

Yeah let's just spend like, 10 times as much. See if that works.

1 ( +1 / -0 )

IMF=International Mob Found

2 ( +2 / -0 )

THANK GOD, my money is ........................................................paying the bank to keep my money ???.

0 ( +0 / -0 )

Login to leave a comment

Facebook users

Use your Facebook account to login or register with JapanToday. By doing so, you will also receive an email inviting you to receive our news alerts.

Facebook Connect

Login with your JapanToday account

User registration

Articles, Offers & Useful Resources

A mix of what's trending on our other sites