Re:Interest Rates: Naturally Negative?
by darawk on Tuesday August 13, 2019 @10:06PM
(#20692121)
Sorry, what I meant was that banks cannot simply keep cash digitally, without physically storing cash and thereby incurring costs associated with doing that.
No, they’re not. They must hold certain quantities of reserves with the Fed. But banks are free to hold the rest as cash in their vaults.
This is why many countries with negative rates still have zero deposit rates.