Livewire has acquired Market Index, the country’s leader in free stock market data.
Find out why.

Negative rates aren’t what you think

Livewire Exclusive

Livewire Markets

Steen Jakobsen, Chief Economist at Saxo Bank, says tightening monetary policy has created a 60% chance of a US recession in 2016. Contrary to popular understanding, he says monetary policy has been tightening since 2014. A counter-intuitive example of this comes from negative interest rates. “I live in one of the few countries where we have negative interest rates. I pay more for money today than I did when the interest rate was positive. The market-based rate may go to zero or negative, but to protect their regulatory capital, the lender put on an extra 1-1.5% in fees. That is really a tax on capital.” Regulators see higher financial risk in lending out money at zero rates and charge the banks a premium for the ability to do this, which is then passed on to borrowers. In this video, he explains how the Fed is ‘taxing’ the US banks.


Livewire Exclusive brings you exclusive content from a wide range of leading fund managers and investment professionals.

I would like to

Only to be used for sending genuine email enquiries to the Contributor. Livewire Markets Pty Ltd reserves its right to take any legal or other appropriate action in relation to misuse of this service.

Personal Information Collection Statement
Your personal information will be passed to the Contributor and/or its authorised service provider to assist the Contributor to contact you about your investment enquiry. They are required not to use your information for any other purpose. Our privacy policy explains how we store personal information and how you may access, correct or complain about the handling of personal information.