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Negative rates: the prospects of changing economic realities
Material posted: Publication date: 17-12-2015
The global financial system is in a steady trend lower rates. In theory, this helps to alleviate the availability of money for economic actors and helps to increase consumption in reality - reduces maintenance costs difficult to be represented in their hulk of public debt levels and uplifts up stock markets. Factor, of course, not the only, but very influential.

Moreover, last years after rates have rested against a zero barrier, the world Central Banks have begun additional programs of stimulation. In this field compete practically all: and FRS with programs of quantitative softening, and bank of Japan, and ETSB with Bank of England. All it does not concern the Central Bank of Russia, it out of the given trend. The Central Bank of Russia changes dollars for roubles and the right of sovereign monetary issue does not possess.

The world economy has so got used to stimulus and accessible liquidity that it is terrible to monetary authorities to turn back: consequences from such change of a course policy can be destructive. Therefore FRS, hinting at fast increase of the rate, does not dare to pass in any way to actions. Nevertheless, despite the huge volumes of the liquidity which have been poured in on the market for last 8 years, and the rate lowered practically to zero, appreciable effect on revival of real economy is not present. It is not possible to achieve steady inflation, the deflation prospect an ominous scarecrow deprives of a dream of the main bankers.

ETSB in the end of October lips of Mario of the Drag has made the next statement for possible expansion of the program of the repayment of actives and the further decrease in rates. For the present the small stock of a course downwards at it is, but «cartridges in a holder» already practically does not remain. In the beginning of November head FRS of Janet Jellen, acting in the Congress of the USA, has told that in immediate prospects introduction FRS of negative rates quite probably. Such provocative vbrosy are zondazhom reactions of a society to a sensitive issue.

What will be further? The system demands new increase in a dose. I assume the further expansion of a policy of escalating of stimulus, global financial addicts cannot get out of this trap any more. Ahead - malohozhennoe a field of negative rates. Clearly, as now, strictly speaking, rates in a reality negative as to measure them it is necessary concerning the real rate of inflation which has been not embellished by obliging statistics. Nevertheless, formally, in the majority of the countries while punching of zero level has not occurred to the developed economy. What there ahead, in this terrible future? After all at transition through a zero directions of a financial stream change. If earlier, at the positive rate under the credit, the debtor paid to the creditor, now - on the contrary! If earlier the bank charged percent to the owner of the deposit it will already take from it money for deposit storage in bank! To live by such game rules without compulsion it is unreal. Let's try to clear, what will be the world with negative rates.

In Denmark of the Central Bank has entered negative rates in the middle of 2012, he aspired to protect a crone from scale inflow of the capital from the next European countries during an aggravation of the Greek crisis and to keep a binding of a crone to Euro. Then it has worked, but this year the situation has repeated again, and the rate should be reduced still. Now it has fallen to-0.75 % annual. It is clear that it is the rate for creditors of the first stage, at the others the backlash to zero is less, but funny things already were. Big bank Nordea had the mortgage loans which rate has been adhered to the rate of the Central Bank with factor. It too became negative! And happy debtors on a mortgage began to receive from bank monthly payments, according to treaty provisions.


The negative rate has raised demand for real actives and has led to a bubble in the real estate market. The prices for her in Copenhagen have grown more than on 50 % since 2012 the European Central Bank prints money and weakens Euro not only for growth of export and increase in competitive advantages of European production. He monetiziruet a debt also tries to raise inflation. If ETSB will increase volumes of stimulation of the markets the capital again can rush to Denmark that can lead to the further decrease in rates and to a rise in prices for real actives. Reserves for this purpose at the market are, demand for real estate can arise from large pension funds. In Denmark, nevertheless, the negative rate has not worked, it has not resulted in normal stimulating inflation. The consumer price index now grows on 0.5 % a year, thus, that the prices for habitation grow faster 12 %.


Let's consider one more example of negative rates, from the near past. It is a question of spare cash of Silvio Gezellja and experience on their use in the Austrian city of Vyorgl in 1932, at the time of storming Great Depression. The German financial theorist and social innovator Silvio Gezell published the books more centuries ago, on a boundary XIX and XX centuries. In its opinion, traditional money is not effective, they disappear from the reference every time when in them there is a requirement, and zataplivajut the market during the moment when their quantity and without that is excessive. Gezell considered that the crises shaking world economy, one of the reasons have non-uniform speed of the reference of money, and urged to force money to work only as a medium of exchange instead of as a store of value, to cancel percent on credits.

Actually, Gezell suggested to make money paid state service for which their owners should pay the commission regularly. He named such money free, free from credit percent. The most known experiment on check of this theory by practice has occurred in 1932 of the Power of the Austrian city of Vyorgl to the population of 3000 persons have dared at it for acceleration of a monetary turn and revival of local economy. The burgomaster of a city was the admirer of the theory of Gezellja and has convinced businessmen and managers to agree on parallel release in the reference of free (interest-free) shillings. The city council deposited in bank of 5000 usual Austrian shillings and has released instead of them 5000 free shillings. This money paid a part of the salary of employees, dealers accepted them as payment for the goods, and city council accepted in them local taxes. The payment for using this money made 1 % monthly, t.e 12 % a year.

The payment was brought by who on hands had a banknote in the first day of month for what on a banknote underside pasted mark face value of 1 % from its cost. Without due quantity of marks the banknote was considered as the void. Necessity of such payment led to that any person who had free shillings, tried to spend as soon as possible them before to spend usual money. Townspeople even sometimes paid the taxes in advance to avoid payment for using money. Within a year free shillings were in circulation 463 times, has been made the goods and services for the sum of an order of 2 million 300 thousand shillings. Usual money was in this time in circulation 213 times. The payment received by city council in 12 % from the reference of 5000 free shillings has made 600 shillings, they have been spent for social needs. For this year in a city the bridge has been constructed, the road condition is improved, the rate of unemployment has decreased on 25 %, and it during Great Depression! More than 300 communities in Austria have expressed interest in use of spare cash by rules of Gezellja, however the National bank of Austria has forbidden circulation of free local money. Disputes in courts lasted very long, however more to repeat such experiment it was not possible.

Though in France, Germany, Spain, Switzerland and the USA were undertaken attempts of introduction of spare cash for struggle against unemployment. In the USA the power have considered that attempt of introduction of local money is attempt of change of the American monetary system, president Roosevelt has published on March, 4th, 1933 the order about time cessation of work of banks and an interdiction of the further release of auxiliary currency.

From times of Great Depression we will return to the present. And now people, having deficiency of money, try to survive, thinking out and applying local systems of calculations. It widely practised Argentina of times of crisis, now local money is used in Greece where people cannot earn euro because of crisis displays, but can render the to neighbours demanded services: someone repairs computers for "candy wrappers", someone nurses the neighbour's child, someone sells the grown up olives and oil. At us such local money was applied in Bashkiria (SHajmuratovo) in countryside, and in Moscow suburbs.« SHajmuratiki », by the way, were classical gezellevskimi spare cash so on a new coil of a spiral of development the embodiment of ideas of the German financial theorist has appeared quite real. For some last decades payment systems have made huge jerk in development, non-cash payments were included into our life, at people psychological restrictions in using cards have disappeared, and large financiers in increasing frequency began to call for refusal of cash currency.

It would allow them to put all monetary turn under control, to increase tax incomes of the states, to strengthen a financial lead dependence and controllability of citizens. And, the main thing, refusal of cash will give the chance to enter negative rates, not symbolical, but real. Otherwise citizens will withdraw the money from banks where they will be assessed with the commission for storage, will translate the savings in the form of cash. Financial analysts speak about it, as about immediate prospects. John Rubino writes: «In the conditions of sharp delay of world economy, first of all for the account of decrease in corporate profits, interest rates in the USA in 2016 should fall. And cash will be forced out or considered as an anachronism that it was possible to lower rates to such level when they will give stimulating effect. So 2016 will bring to the world negative interest rates and numerous unforeseen consequences».

In the light of appeals to refusal of a cash which were said also by our Minister of Finance A. Siluanov, it is necessary to mention the quasimoney managing practically without banknotes and coins: numerous kriptovaljuty. The most known and extended from them is Bitkojn. It is one of widespread examples of the decentralised digital set of keepers of value with which can exchange. Though the general capitalisation of Bitkojna (all about $4 mlrd) in world scales seems insignificant, but the technologies realised at its creation cause serious interest of large financial institutions. Financiers estimate potential danger of Bitkojna as the new system intended for transfer to value for which realisation banks are not necessary, also they want to use technology and ideology finds blokchejna (the distributed account book of transactions bitkojna) at construction of new system of the calculations managing absolutely without cash, created in interests of global financial corporations. blokchejn it is very steady, possesses high level of trust of users, their support in a case of problems, it is improved in parallel with a fast-growing and developing external excited environment.

There is a weight of others kriptovaljut, made on the sample and similarity bitkojna - altkojny. And some of them even it is technologically more attractive, than the sample. But bitkojn was the first and has had time to get popularity and to increase client base before the others. Experts estimate that will catch up bitkojn to its competitors difficult, however this competition actively advances technologies. We will sum up. We live during surprising time when many processes and the phenomena seeming to us almost eternal, promptly fall owing to exhaustion of the resources necessary for their maintenance, and under the pressure of technologies. It concerns also financial sphere. The world economy was at a deadlock and has no more resources for qualitative development. The birth of new financial and economic systems of the world can occur only through deep and long crisis as benefitsiary former systems are very strong, have saved up huge resources and will mercilessly resist. I, as well as many, wait for an epoch of negative rates, attempts of cancellation of cash, explosive growth of the price of gold. Quite probably that the further aggravation of crisis will lead to necessity of introduction of parallel local settlement systems, I do not exclude, as with application gezellevskih principles of spare cash.

Probably that they will be realised not in monetary forms (the repressive device is strong), and in the form of consumers' co-operative society shares.


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