Basically the lending incentive central bankers feel the need to create – negative interest rates – loudly explains to anyone with a pulse why the negative rate initiative will have nothing to do with economic growth. If banks need a push to cease being paid a prosaic central bank rate of return, it’s a certain sign that they’re not taking much risk with the funds they are lending out. It’s a sign that they’re likely lending to blue chip borrowers for whom capital is already plentiful, and for whom borrowing would be pretty easy with or without “negative rates.” In short, the known that would have access to liquidity would and will still have access to liquidity.
