There are two ways to judge the ECBs moves.
1. How will they affect markets?
2. How will they affect the economy?
While Kiesel Soze says it’s the hugest shit ever, the distinguished and eloquent James Bevan, from CCLA, says it’s complete horseshit and that it will have no material impact on the ECBs economic woes.
To that end, Bevan believes the ECB will regret these moves, and rue them in a mournful manner.
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Dr. Fly, I asked this in your previous post, but I’m trying to figure out if there are any positive impacts to banks that incur negative rates. Theoretically, the one positive I see is that, if money is deposited with them, they are taking a cut of it. Am I wrong on this, and are there any other positives? My mind wandered to this due to the massive move up in European banks today.
Small potatoes on the negative yield gain from depositors. The real money is made lending money to businesses or doing deals
IMO, the only reason for a move up in euroland banks is a perceived lessening of insolvency risk. Perception is reality. Until it isn’t.
3rd way is how will they effect the P/L