Negative interest rates/interest rates

Franz Seitz, Professor at the Ostbayerische Technische Hochschule in Germany, discusses the challenges for 2019 and the priorities for 2020.

Cash sets a floor to negetive interest rates. Without cash, central banks could provide digital currencies to the public and compete with retail banks. Consumers actually want it.

Economist Pierre Lemieux contradicts Kenneth Rogoff's arguments to ban cash due to its use in criminal activity and constraining effect on monetary policy. Banning cash would not only inconvenience a lot of people, it would also come with many new regulations and controls, including against crypto-currencies and pre-paid cards.

Yves Mersch, Member of the Executive Board of the ECB highlights the risks associated with a cashless society.

Cash is a blessing not a curse.

Are we seeing weak signals that negative intetests rates have reached the tipping pont where they could be passed on to consumers?

Negative interest rates represent significant costs for banks which deposit money with the ECB. Some banks are examining the alternative option of storing banknotes in their vaults.

On May 5, the ECB decided to discontinue the production and issuance of the €500 banknote, after. a series of criticisms targeting the €500 and high-denomination notes more generally. The same critics are pursuing their claims and are now calling for the further elimination of high-denomination notes. Unfortunately, they are forgetting three things.