Name: 中央銀行はマイナス金利が効いていると言う (Central Banks say negative interest rates are working)
Uploaded: 2021-01-14T09:37:29.000Z
Duration: 4 min 26 s
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Eight minutes to go in the training session.

All three majors lower on the day, not too far away from lows of the session.

Still kind of seeing some negative fallout from this this report that there would be restriction on the issuance of some Chinese visas.

This, of course, coming as Lou and Steven Mnuchin set to speak, I believe on Thursday, down in Washington, D.

Lower level talks happening right now between the US and China as it relates to trade, but certainly a negative trade overhang here.

And then, of course, next week we get into the heart of earning season and all kinds of negative things that could be sitting there.

But speaking of negative things that everyone hates that be central banks, eso central banks, backed into interest rate or negative in strict policies in a new study, According to B, I s a kind of they outline a world in which central banks are actually doing fine, I think.

And I think for me, Brian, The headline here was that, um I know everyone didn't like this, but the B I s had to find and study that expanding the balance sheet actually increased asset prices, and he was very upset about that.

But I find it to be kind of a a positive read on Central Bank efficacy, if you will.

It's the bank for international settlements.

It's actually an organization that's owned by the 60 central central bank of central central banks.

And they all pulled each other central banks which have implemented negative monetary policy and said, What do you think about negative monetary policy and surprise?

The fighting from the B I s was that negative interest rates did exactly what it was meant to do at a high level, right?

Which is it was able to bring down long term yields and basically message to markets where it was implemented because it wasn't implemented to us implements in Europe implants in Japan.

But in those jurisdictions, it was indeed able to flatten the yield curve and make yields negative.

Now, what they did find was that there wasn't an issue with cash boarding because this is again on the conventional monetary policy had never been done before.

People wondered if you're going to pay a negative rate when everyone would just grab the money out of banks because you would have to pay to keep the money in the because what you're regulated money in the bank?

They said the past through wasn't down to the consumer love.

So yes, banks were receiving negative rates to leave money at the central bank.

But ultimately, Bankston end up charging people who have retail deposits to keep that money there, so no bank run is good.

The other thing that they found was that lending did increase.

But I love the caveats that they had here.

So on those suspects it was a great success.

They said it was fairly effective policy On the negative side, they said, Well, we don't It did create frothy stock valuations.

We don't know what the long term effects of it are, and there may have been some liquidity issues and short term money markets government bond markets.

But aside from all that, the negative interest rate policies work so great.

I mean, the other side of it was saying what we should raise rates that we could really wash out.

You know, we could have riots in the streets.

That way we'll have the correct monetary policy setting.

Yeah, that's basically with the 09 2010 Washington op ed argument.

If your pain early the price here, what's the problem here?

Is that for those that don't advocate for negative interest rate policy, you have to confront the fact that all these central banks are backed up against very low rates.

So if it's not negative interest rate policy, it's got to be something else.

It's gonna have to be quantitative easing.

It's gonna have to be forward guidance or some combination of all those things.

And because of the sheer nature that these air all unconventional, we need more studies like this, and it probably be better off if you were independent bank Selves that can tell us what the actual effects of those things are.

The problem is, monetary policy operates on the lag, so we won't know until well long invariable.

Even this survey, As you point out, they kind of are saying the jury's still out right.

It's one of the risks on the on the longer term side.

But on the short term side, they said it was very effective with contained side effects.

All right, Brian Chung, you and I can defend the Fed later.

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