Tag Archives:

negative rates

Will the €500 note trade at a premium or discount once the ECB stops printing them? The poll results are in…

Earlier this week Richard Woolnough wrote a blog about negative rates and tax on interest.  In it he also suggested that once the ECB stops printing the €500 note and ends issuance of its existing notes at the end of 2018, the legacy notes will trade at a premium.  The argument is that because the notes will remain legal tender across the Eurozone, demand for a note with the lowest storage cost…

Read the article

Negative rates – a tax on saving? Don’t forget about actual tax

There has been much discussion recently that by introducing negative rates central banks are effectively taxing savings. This is self-explanatory, and is one of the criticisms of how negative rates can distort economic behaviour. This however is not a new phenomenon.  Let’s not forget that money has always been effectively clipped by the traditional enemy of savers – inflation. Fortunately, hol…

Read the article