|>>|| No. 5905
>Sweden is shaping up to be the first country to plunge its citizens into a fascinating — and terrifying — economic experiment: negative interest rates in a cashless society.
>The Swedish central bank held its benchmark interest rate at -0.35% today, the level it has been at since July.
>We reported at the weekend how central bankers and investment bank analysts are increasingly discussing when this might happen. And yesterday, Italy sold a two-year bond at an interest rate of -0.023%, which means investors have to pay to lend Italy money rather than receive interest on their loans. (Why would you buy such a bond? Well, if you believe that you’ll get even worse terms in the future from other creditors — hello, Sweden! — then suddenly -0.023% starts to look pretty good.)
I don't understand lads. Fair enough, forcing your customers to pay for an account at a bank, but why would anyone buy a negative interest rate bond? I don't understand what is going on.