FAST FIVE: 12 Reasons Why Negative Rates Will Devastate The World

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Indeed, the latest TIC data showed that while USTs have seen cumulative outflows of nearly $30bn YTD, Agency and corporate bonds have seen inflows of $160bn.

And pushing deposit rates further into negative territory at the Dec15 and Mar16 meetings did not appear to boost lending growth rates further.

Higher rather than lower bank lending rates The message is similar to that from credit creation: the introduction of modestly negative policy rates appears to have resulted in a decline in bank lending rates to the real economy, i.e.

The sum of Spanish and Italian Target 2 balances has deteriorated by moving deeply into negative territory since the ECB first cut its depo rate to negative.

This is especially true in the euro area where several countries face a persistent drag from non-performing loans, and where the ECB is very likely to get actively involved in reducing NPLs further by outright buying the loans.

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