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Why Negative Interest Rates Are Dangerous

Money For the Rest of Us

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The Money for the Rest of Us Hub

Since the Brexit vote, European banks have lost a third of their equity value just because investors are worried about lower profitability for banks. As the net interest margin shrinks, there's less coverage for bad loans and bad loans as they go up. The idea that loans create deposits is how banks create money. What happens when loans go bad, they become non-performing.

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