Recall that from October 27, 2014 this interest rate was in Sweden at a historically low level: 0%. Now she is on the downside.

At the same time, Riksbanken is buying government bonds worth 10 billion crowns and is ready to buy more, according to a press release from the central bank.

Analysts at the Riksbank suggest that low inflation, which in December was at minus 0.3% - according to the pace of development for the year, may have already reached, so to speak, the "bottom" and will now begin to rise. In any case, the goal of 2% inflation per year is still far away.

Analyzing the situation in the outside world, the Riksbank concludes that the global economy is "recovering" after the financial crisis, but slowly. Since December last year, however, the risk of a downturn in the economy has increased. In particular, the fall in oil prices, which may have a positive effect on production growth, on the other hand, leads to low inflation on a global scale. The situation in Greece also does not add confidence in the development trends of the world economy.

With regard to Sweden specifically, the Riksbank believes that both low oil prices and the weak exchange rate of the Swedish krona and the low interest rate of the bank contribute to the growth in production. According to the bank, Sweden's GDP will grow faster and the labor market will strengthen.

What will this "minus rent" entail for the people of Sweden: What will happen to bank loans? What will happen to the money that people put aside "in reserve" in their deposit bank accounts? What will happen to our mortgage loans?

The negative refinancing rate means banks have to pay to deposit money into their Riksbank accounts. And they are obliged to do this if, as a result of all banking operations of the current day, they have money in the cash desk (overnight/overnight deposits).
But will this mean that banks will want to cover these costs at the expense of their customers? And will they start charging us for wanting to deposit our savings into a savings bank account?

In principle, the interest rates on our accounts or mortgages should not be affected by this negative rent. Because the level of interest on deposit accounts and on loans is determined by each bank individually, and not by the Riksbank.
But for the banking system as a whole, the level of this short-term refinancing rate is of great importance.

This rate determines the interest that banks pay when they borrow money from each other. It can also lead to enterprises being able to borrow at lower interest rates. And this, in turn, can lead to an increase in investment, that is, to exactly the stimulation of the Swedish economy, which the Riksbank is striving for by lowering the interest rate. And the growth of production usually "launches" the mechanism of rising inflation. This is what the Riksbank is trying to achieve.

Experience of other countries with "negative" interest rate shows that if this minus is small, then this does not affect small clients who habitually save money in bank accounts. In Denmark, FIH announced in March last year (following a rate cut by the central bank) that for every 1,000 kroner a customer holds in the bank, they will have to pay 5 Danish kroner. According to the Wall Street Journal, customers have already begun to leave this Danish bank. What will happen if other banks follow the FIH, the newspaper Svenska Dagbladet rhetorically asks in its economic supplement today.

Anticipating today's move by the Central Bank, two directors of large Swedish private banks have already spoken out on this subject and assured their clients that they - that is, all of us - will not have to pay to keep their money in the bank.
These two directors are Annika Falkengren from Svensk Enshild banken/ SEB and Mikael Wolf from Swedbank.

Mikael Wolf from Swedbank assured (in an interview with the Ekot newsroom) Swedish Radio that banks will do everything to protect their small depositors. Because otherwise, they - these depositors - will simply take their money from the bank and hide it, as they say, "under the mattress." However, neither he nor his colleague Annika Falkengren can give any guarantees. No one can guarantee that "negative rent" for banks will not turn into equally negative rent for small depositors.

An expert in private economic affairs (microeconomics) Annika Creutzer, for example, believes that "negative rent" will affect not only how and where people save their money, but also the level of wages. Here is how she explains the impact of this interest rate cut:

This means that when banks borrow money from the Riksbank, it (the Riksbank) charges for it. 0.1 percent. This means that banks will want to give us, customers, even more loans and credits, and these loans will cost us less. But there will be no interest on savings at all, this is a new situation for us. We may also have to pay to open a savings account in some bank, says Annika Kreuzer, expert and journalist.

She describes inflation as a kind of "lubricating oil" of the economy and explains its necessity by the fact that you need to pay for goods and services. The aim of the Riksbank is to keep inflation low and stable. But now, with increased anxiety and turbulence in the global economy since December last year, the Riksbank is cutting interest rates and buying 10 billion crowns worth of government bonds. The situation, however, is not unique to Sweden, says Annika Kreuzer:

This is an international problem. Sweden is a small country with an open economy, large exports and imports. We are influenced by what is happening in the world. What is happening now in Sweden has already happened in Denmark and Switzerland.
Falling oil prices, troubles in the Eurozone, limping US production growth and the economic crisis in Greece are all affecting the Swedish economy. And it could be years before things change, she says.

How will today's interest rate cut affect ordinary people? She answers this question:

I don't think there will be any change in mortgage loans. But savings in the bank lose all meaning, because there is no interest on them. But it’s better to keep money in the bank, even if it doesn’t grow there, than at home under the mattress. Just for security reasons, Annika says, implying that you should not expose yourself to the risk of robbery, home theft, if you hide money at home.

Annika Creutzer suggests that banks may increase fees for savings accounts. It is hardly worth hoping that interest on deposits will increase. But what is important, she emphasizes, is to check: does the bank have state guarantees for deposits? So that this money does not "melt" in the account, over time.

As for the impact of a negative interest rate on the level of wages, it suggests the following scenario:

It is likely that employers will say: since we are not paid more for our goods (ie there is no inflation), then we cannot raise wages either. It is possible that for some categories of workers this will mean lower wages, said Annika Kreutzer in an interview with our colleague Isabelle Swahn

The European Central Bank (ECB) has decided not to change the direction of monetary policy. The base interest rate remained at a record low level - 0 percent, the rate on deposits - at minus 0.4 percent, the rate on margin loans - 0.25 percent.

Recently, low to negative interest rates have become a fashionable trend. Even in Russia, a number of economists have appeared calling for quantitative easing and lowering rates as much as possible. Earlier, similar experiments with the rate began to be carried out by the central banks of European countries.

Last year will be remembered for a high-profile story that happened to the Dane Hans-Peter Christensen, who instead of paying on a mortgage loan taken under "floating" interest, he himself received almost two and a half hundred Danish crowns from the bank.

This was the result of the Danish Central Bank setting negative interest rates a few years ago. As a result, Christensen's loan rate also became negative. That is, he did not owe the bank, but the bank owed him.

If you remember how it all began, then you need to say that negative rates arose as a way to combat deflation and a long recession.

Former US Federal Reserve Chairman Bernanke was nicknamed The Helicopter for promising to scatter money from the air to give the markets free cash

Usually, the central bank of any country has two main tasks: the fight against inflation and unemployment. To do this, the Central Bank has a whole range of monetary policy instruments (MP) in its arsenal, from interest rates to foreign exchange interventions. However, this toolkit is powerless when prices are falling in the economy and there is a long recession or even stagnation.

Japan was one of the first to face such problems, and they stretched out for more than 20 years. It is the Japanese who can be considered the founders of the policy of quantitative easing, stimulating the economy by increasing public debt and negative interest rates.

What is the purpose of this mechanism? Negative interest rates are set by the central bank, which charges banks interest to encourage them to invest more money in the economy rather than keep it in their accounts. In such a situation, it is really more profitable for banks to lend to a business that receives money almost for free than to sit on a cushion with liquidity that causes losses.

At first, such innovations in monetary policy were perceived very skeptically, but the US mortgage crisis in 2007 and the subsequent quantitative easing program, introduced by the then head of the Fed, Ben Bernanke, significantly changed the attitude towards new approaches to monetary policy.

Bernanke, nicknamed Helicopter Ben, promised to drop money from a helicopter to give the markets the liquidity they needed and fight deflation in the country. Ultimately, the scale of quantitative easing in the United States exceeded four trillion dollars, and the period of zero interest rates stretched for almost 10 years. The European Central Bank and the Swiss National Bank followed suit in the United States. They went even further and introduced negative rates.

1.12 percent. This was the year-on-year inflation in the Eurozone in December 2016. According to preliminary data, the eurozone will take the eighth place in the world in terms of consumer price growth.

Despite the fact that this kind of innovation is gaining momentum and more and more countries are joining it, one should not forget about negative side such a policy.

Firstly, due to low interest rates and the depreciating national currency, capital flight from the country is increasing. In the era of high digital communications, it is easier and more profitable for banks to invest money in foreign assets with higher returns than to lend to someone at a low interest rate at home.

A series of economic crises forced the population of the entire planet to be more prudent with their funds and manage them wisely. This trend is characteristic not only of ordinary consumers, but also of organizations.

As a result, many purchases began to be made more prudently and demand began to shift from expensive products of developed countries to cheaper products of developing countries. This trend could not be ignored by the economic representatives of developed countries.

If earlier in countries with developed economies aimed at exporting their products, the authorities made subsidies and other forms of support for domestic production, then over time these measures ceased to bring the desired result.

However, explicit state support in such countries is beginning to be replaced by a “negative refinancing rate”. With such a level of interest, we can say that the state is no longer able to ensure the inflow of investments into the economy at its own expense. As a result, the regulator introduces a negative interest rate that is not acceptable for the "logic of the free market".

Such an aggressive and irrational policy of the economic regulator forces individuals and legal entities to resort to risky investments instead of accumulating money supply. In the medium term, these measures can provide some growth and some benefits. However, the state monetary policy of developed countries continues to become more and more "soft", although it does not help much to improve the situation.

The reason for this trend is the limited sales markets. At the beginning of the 20th century, this was called the "crisis of overproduction", but it is a crisis only for those countries that are not able to sell their products at the previous price level.

In this case, we can say that there has been a complete saturation of the market with goods, and in order to maintain, and even more so increase, one's market share, one has to lower its value. If in developing countries products, a priori, are cheaper due to low production costs, then in developed countries there is nothing left but to artificially spur their economy “veiled-directive method” with the help of a negative refinancing rate, which, at the same time, contributes to stopping the growth of the national currency. As a result, there is a reduction in the price of goods on world markets.

The negative dynamics of the refinancing rate can be noted in a number of European countries, whose markets have long been “saturated”, and in order to obtain additional advantages over foreign competitors in conditions of economic instability, one has to focus not only on product quality, but also on the price of goods.

As a result, many countries with developed export economies are forced to pay extra for exports to prevent their stagnation. further development. In Switzerland and Denmark, the interest rate of the economic regulator has already amounted to -0.75%, in Sweden - -0.25%, on average in the Euro zone it is -0.2%. Close to negative rates and Israel with the US.

For the Americans, judging by the recent speech of the head of the Fed, nothing seemed to have changed, but all investors were waiting for an improvement in the situation in the largest economy in the world. In addition, they saw a hint of the possibility of further easing of monetary policy, which caused many noticeable concerns about the financial stability in this country. As a result, even the previous increase in the rate by the US regulator could not stop the increase in demand for "anti-stress assets" in the form of precious metals.

Apparently, the US is trying to organize a new transatlantic economic union precisely in order to provide its products with additional advantages and take over a significant share of local markets. However, this solution will not be able to solve the problem and as a result, their rate will come to negative values.

A negative refinancing rate is so abhorrent to financial logic that even programs servicing bank lending operations sometimes fail. Although this measure is positioned as a “cure for deflation”, in the end it does not cure, but only postpones the moment of a new world “crisis of overproduction”. It is planned due to the stagnation of the developed world economies, which pushes them to try to master new markets.

Andrei Solovey, Economic Review

The Russian banking community came up with the idea to introduce negative interest rates on foreign currency deposits. The Central Bank did not support the initiative. As a result, banks may refuse to accept euro deposits from the public.

Why is the Central Bank against

Commenting on its decision, the Central Bank gave two arguments. Firstly, “the practice of setting negative rates exists only in certain countries of the eurozone and for certain transactions”; secondly, it can “lead to the accumulation of large volumes of foreign exchange liquidity outside the banking system”, that is, to the growth of the shadow foreign exchange market.

The Central Bank may have other reasons to object to the introduction of negative rates on client foreign currency, bankers say. “In addition to the business component, there is an image component. Many clients, especially individuals, may take negative rates negatively,” said Andrei Stepanenko, deputy chairman of the board of Raiffeisenbank. Mikhail Matovnikov, chief analyst at Sberbank, agrees that "the appearance of negative rates is a rather serious negative."

The banking community can solve the problem on its own. It is easier for bankers to stop attracting liquidity in euros by removing the corresponding deposits from their product line for individuals, market participants point out. “As for individuals, the way out may be to stop attracting new deposits in euros,” Stepanenko told RBC, adding that Raiffeisenbank is considering such a possibility. In his opinion, other players can choose this strategy as well. As a result, Russians' ability to diversify their savings will shrink.

However, while in the banking community there is no consensus on this matter. Sberbank and Citibank declined to comment on rates plans. “As for VTB24 and the retail business of VTB Bank, there are no plans to adjust the yield on foreign currency deposits in the short term,” said a representative of the VTB Group.

It will be more difficult for banks to go the same way with respect to legal entities. “Good corporate clients are critical for most banks, and no one will refuse them because of losses on borrowed euros. Banks will have to solve this problem by improving the work of their treasuries, ”a manager of one of the top 30 banks in terms of assets told RBC.

In his opinion, the problem did not appear yesterday, but with proper management of liquidity flows, it can be resolved. “Most likely, the association’s appeal to the Central Bank was caused by a surge in liquidity inflows in euros from clients of some specific banks, which they justifiably backed up with a reference to the overall difficult situation on the market.”

It is possible, RBC's interlocutor notes, that in recent months the situation has been aggravated by the accumulation by Russian companies in their accounts of foreign currency, including euros, to pay for external debts. In the first quarter of 2017, according to the Central Bank, these payments should amount to more than 15 billion in dollar terms.

Save

Negative rates became a reality of the modern financial world a few years ago. Dreaming of financial stability, many Russians do not even imagine what amazing (in our opinion) forms it takes in prosperous countries. There, in an almost inflation-free economy, depositors sometimes do not receive income from their bank investments, but on the contrary, sometimes they themselves pay the bank for the service of keeping money in the account. Will the new reality reach Russia, and under what conditions will this become possible?

Bold experiments

Actually, human history already knew the times when, when accepting capital for storage, its “guard” took remuneration from the owner for its deposit services. This is how banking began centuries ago, when gold was the only reserve currency. Already in our time, the idea of ​​a negative deposit interest at the state level was first theorized by the German economist of the early 20th century, Silvio Gesell. His model of free money assumed a small regular payment by citizens to the state for the issue of money (as a payment for a public service). However, the loan interest was completely zeroed. Money, thus, ceased to serve as a store of value, accelerating its turnover in the economy.

And although a quite successful practical experiment “according to Gesell” took place on the territory of several Austrian cities in the 30s and 40s of the last century, still modern economists 10 years ago considered it unthinkable that negative rates would become a reality of the 21st century. The idea of ​​financial demurrage still makes many people turn their fingers to their heads. In the minds of most of us, at best, at least a zero rate fits. However, in 2009, the national bank of Sweden, the Riksbank, became the first modern central bank to take fees from its subordinate credit institutions for money received from them on correspondent accounts, i.e. introduced, thus, a negative deposit rate at the level of minus 0.25% per annum. Which, however, did not yet mean an unambiguous and instant extrapolation of negative returns on bank deposits for citizens and corporations.

Countries and rates

Since then, the Swedish model has been gradually adopted by the Central Banks of other economically developed countries, which, after observing a little of the pioneer, began to introduce extraordinary methods at home in 2012-2016. The negative rate has already been tested (following Sweden) by Switzerland, Japan, and Denmark. However, their key rates do not stand still, they change (almost imperceptibly in the Russian view - by hundredths or tenths of a percent), sometimes rising to a positive level slightly above zero.

If we talk about the experience of the pan-European ECB, then two years ago it lowered its deposit rate from 0% to minus 0.1% for the first time, while maintaining the base rate within 0.15-0.25%. The positive banking rates of Canada, the USA, the UK, Norway are still fluctuating around zero... Their regulators are only looking at someone else's experience. At the same time, there are already American and European government bonds with negative yields (it turns out that investors pay extra to governments for keeping their capital). Looking back a little, we will see that the Japanese regulator, long before the Swedish innovations, kept its deposit interest at the low level of 0.1% for several years in a row in 2001-2006, not even thinking that it would ever enter the negative zone.

Why does the government need negative rates?

What is the reason for such an amazing interest rate policy? Is it possible that Western banks have got so much money that they decided to turn depositors against themselves and bribe borrowers with a small commission, instead of earning on loan interest? After all, the policy of negative interest rates of the Central Bank is not immediately, but gradually transferred to relations between commercial banks and their clients.

To understand, let's remember the conditions under which the Swedish Riksbank began its bold experiment. 2009 is the year the global financial crisis continues to rage, during which investors lost confidence and stopped investing in the real economy, hiding their capital in quiet, safe bank deposits. Almost zero inflation generally turned into deflation, which by that time had reached, in particular, in Sweden a level of minus 0.9%. In response, the economy stopped growing: in addition to GDP, wages, the number of jobs, and demand for goods and services stopped growing. Demand for loans also fell, as potential borrowers feared that the crisis would prevent them from paying off their debts in the future. Unclaimed liquidity accumulated in banks, almost stopped working and making a profit.

Measures were required to stimulate economic growth. To restart the economy, theorists have calculated the effective rate of the target inflation rate close to 2% per annum (strange as it sounds for a Russian, shocked only by the fact that inflation in some countries is deliberately raised from negative values). At the same time, the national currency must be protected from sharp fluctuations in the exchange rate, which is not easy. Economists believe that the introduction of negative lending rates will encourage citizens and corporations to take loans, forgetting the fears of losing solvency. A negative deposit rate might force people to withdraw capital from risk-free bank deposits in order to invest in real businesses, such as real estate development. Thus, the long-awaited growth of added value should begin, which will also bring profit to investors.

What is good for a borrower– then the depositor is bad

It is clear that so far not every Western bank boldly transfers the policy of negative rates to relationships with its ordinary customers, as the state regulator does with supervised credit institutions. Not every private bank is willing to pay borrowers or charge its depositors. But let's see how this happens in real life using a few well-known examples.

Almost four years ago, the Central Bank of Denmark introduced a negative base rate (similar to our key rate), which today has changed to minus 0.65% (with inflation in 2014-2015 plus 0.6%). One typical Danish mortgage lender who took out a home loan more than 10 years ago was surprised when the bank paid him a small premium at the end of last year instead of charging interest on the loan again. At the same time, the floating annual rate of the mortgage program of his bank was approximately +0.56% per annum at that moment. However, according to the mortgage agreement, the client must regularly pay additional commission fees to the bank.

The name of the European bank that was the first to start charging interest from its depositors for keeping money has not been precisely established. Journalists suggest that it was one of the Swiss credit institutions. They say that a negative deposit rate is charged there for amounts of more than 10 million Swiss francs. According to other sources, the minimum threshold is only 100 thousand CHF, but already in several banks. The introduction of a negative interest rate for deposit transactions is now being discussed in many European countries, incl. far from the total well-being of Spain.

Side effects

It seems that paid deposits are still a headache for wealthy VIP clients. It is their large amounts that are difficult to fully transfer to cash, hiding everything, for example, in a safe. Cash out costs can be more expensive than negative interest. The average population, however, may not be affected by such a rate. Citizens of economically developed countries have long been accustomed to almost zero rates. Their deposits often grow only by tenths of a percent, approximately equal to our demand deposit rates.

It is also not yet clear how long the era of negative rates will last, how effective it is and whether it is applicable to different economies. After all, along the way, problems have become aggravated that are not always resolved quickly and successfully. For example, a near-zero interest rate could lead to another credit bubble in the real estate market. However, there is reason to believe that Western Central Banks will find a reasonable solution and be able to turn monetary policy in the right direction in time.

Are negative rates possible in Russia?

Russian investors may not be afraid of "paid" deposits for a long time. The high level of inflation, and numerous other risks for the domestic economy, do not yet give grounds for introducing nominally negative rates in our country. In addition, one of the conditions for the emergence of a “good” deflation is a reduction in production costs (for example, due to the introduction of IT technologies), and not a fall in the effective demand of the population.

But de facto, the problems of our investors, although they lie on a slightly different plane, still make us afraid of the decrease in the value of savings over time. For example, there is a known imbalance between the deposit rate and the price growth index, when inflation eats up the value of invested money, sometimes more than the deposit interest covers this depreciation. And not always foreign currency deposits (low rates of which are already approaching European ones) save from inflation and devaluation. Especially given the sharp fluctuations in the ruble exchange rate up and down and the intention of the authorities to prevent the strengthening of the ruble, so as not to increase the deficit of the Russian budget, which is highly dependent on the export of hydrocarbons.

Experts suggest that the downward trend in deposit interest in Russian banks this year will continue. However, not to negative values, at least nominally. The chairman of the Bank of Russia fears that inflation in the Russian Federation (calculated by Rosstat) will hang for a long time at the level of 6-7% per annum. The inflation target for the Central Bank is an average figure of 4% by the end of 2017. And some independent economists predict the beginning of the growth of the domestic economy no earlier than 2020, and even then under certain conditions.

Oksana Lukyanets, expert at Vkladvbanke.ru