Negative interest rates pursued by central banks of distressed economies are more of a problem than a solution. They bleed investment income from financial institutions already facing asset write-offs. Currently, this is the quandary of Italy and its banks facing bankruptcy. Though a bailout is the norm for depositors of democratic socialist governments, Italy will be hard pressed to do so given budgetary and EU constraints. In this case, exit from the EU becomes an alternative. Continue reading
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