Can banks survive negative rates?
“The ill effects of these trends will initially vary depending on how profitable a country’s banks are, as well as their interest margins and the quality of their loan portfolios. European and Japanese banks facing low profit margins and a growing pile of non-performing loans are especially vulnerable. And, ultimately, the problems will spread. U.S. banks have begun to lower earnings guidance, blaming lower rates.”
USAGOLD note: Another incisive piece of analysis from Satyavit Das. At the link above, he offers a critique and a warning on the negative feedback loop associated with negative rates.