Of all the disturbing side-effects of modern monetary policy, the worst might be the way artificially-low interest rates encourage small savers to take outsize risks. Now governments are starting to insist:
How Denmark Is Trying to Get Savers to Invest in Risky Assets
(Bloomberg) – In the country with the longest history of negative interest rates, an experiment is under way. The minister in charge of Denmark’s finance industry wants savers to shift some of the billions of kroner now in bank deposits over to riskier assets.
Danes have about 840 billion kroner ($135 billion) in bank deposits, the latest central bank figures show. Nykredit, the biggest Danish mortgage bank, estimates that number will continue to grow through the end of 2017, marking a record.
But those bank deposits pay no interest. Add the effect of inflation, and savers are actually losing money. For corporate clients, banks charge a fee to hold their deposits, making the loss even bigger.
This post was published at DollarCollapse on NOVEMBER 29, 2017.