In another reminder that monetary unorthodoxy in the face of NIRP is
coming to a savings account near you, overnight the RBS banking group
warned 1.3 million customers they could be charged negative interest
rates if the Bank of England cuts base rates below zero. The group,
which includes NatWest, wrote to its business and commercial account
holders about the potential changes, which mean they could lose money
even when they are in credit.
As seen in the letter posted below, the bank warned that: "Global interest rates remain at very low levels and in some markets are currently negative. Dependent on future market conditions, this could result in us charging on credit balances."
Source: @camcubed
As Sky reports, RBS and NatWest would be the first banks in UK history to charge negative interest rates. However, a spokeswoman for the group stressed there are no plans to inflict any of these changes on its personal banking customers.
"We will consider any necessary action in the event of the Bank of England base rate falling below zero, but will do our utmost to protect our customers from any impacts," she added.
The spin provided was that any cut in the base rate would be better news for borrowers, as those on so-called "tracker" mortgages would see the cost of their monthly bills fall.
However that will hardly placate already anxious savers who will hardly benefit from the modest decline in mortgage payment and who will soon see returns on their funds slide even more in the event of a reduction to 0.25% as expected and/or be forced to pay their bank should the BOE also go NIRP.
Earlier this month, Bank of England governor Mark Carney said he was reluctant to reduce rates below 0.25%, warning: "If interest rates are too low or negative, the hit to bank profitability could perversely reduce credit availability or even increase its overall price." That may be changing after Bank of England rate-setter Martin Weale said “immediate measures may be needed” to combat a slowdown in the economy following a drop in business sentiment data. Weale’s comments were a surprise coming off his suggestion a week ago that there was “no need for rate cut.”
And while savers may once again be punished as a result of further central bank tinkering, investors are set to benefit that much more as the FTSE 100 - so widely expected to collapse in the aftermath of Brexit by "experts" - FTSE100 continues to soar on even more liquidity generosity courtesy of the BOE.
Source: http://www.zerohedge.com/news/2016-07-26/rbs-warns-clients-may-face-negative-interest-rates?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+zerohedge%2Ffeed+%28zero+hedge+-+on+a+long+enough+timeline%2C+the+survival+rate+for+everyone+drops+to+zero%29
As seen in the letter posted below, the bank warned that: "Global interest rates remain at very low levels and in some markets are currently negative. Dependent on future market conditions, this could result in us charging on credit balances."
As Sky reports, RBS and NatWest would be the first banks in UK history to charge negative interest rates. However, a spokeswoman for the group stressed there are no plans to inflict any of these changes on its personal banking customers.
"We will consider any necessary action in the event of the Bank of England base rate falling below zero, but will do our utmost to protect our customers from any impacts," she added.
The spin provided was that any cut in the base rate would be better news for borrowers, as those on so-called "tracker" mortgages would see the cost of their monthly bills fall.
However that will hardly placate already anxious savers who will hardly benefit from the modest decline in mortgage payment and who will soon see returns on their funds slide even more in the event of a reduction to 0.25% as expected and/or be forced to pay their bank should the BOE also go NIRP.
Earlier this month, Bank of England governor Mark Carney said he was reluctant to reduce rates below 0.25%, warning: "If interest rates are too low or negative, the hit to bank profitability could perversely reduce credit availability or even increase its overall price." That may be changing after Bank of England rate-setter Martin Weale said “immediate measures may be needed” to combat a slowdown in the economy following a drop in business sentiment data. Weale’s comments were a surprise coming off his suggestion a week ago that there was “no need for rate cut.”
And while savers may once again be punished as a result of further central bank tinkering, investors are set to benefit that much more as the FTSE 100 - so widely expected to collapse in the aftermath of Brexit by "experts" - FTSE100 continues to soar on even more liquidity generosity courtesy of the BOE.
Source: http://www.zerohedge.com/news/2016-07-26/rbs-warns-clients-may-face-negative-interest-rates?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+zerohedge%2Ffeed+%28zero+hedge+-+on+a+long+enough+timeline%2C+the+survival+rate+for+everyone+drops+to+zero%29