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3 Comments
The cynic in me is wondering whether the RBNZ is concerned that if we go into negative interest rates , that Bank capital will be eroded as people withdraw their funds ?
The reality is that negative interest rates in the context of a western capitalist free market economy are hugely problematic ............... its unknown territory for us
Deposits aren't capital, they're funding. In the context of bank regulation capital refers to common equity, retained earnings and equity-type instruments (hybrids,coco's etc).
Completely correct. It amazes me how opinionated some of the comments are around bank and capitalisation yet fail to understand the basic difference between funding and capital..... and that is despite the sterling efforts from Gareth and Interest.co.nz to educate all.
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