Isn’t cash the only thing preventing banks from offsetting the negative interest rates to the general public?
For the time being people would just get out of their deposits but if cash gets banned then things become more complicated.
For the time being people would just get out of their deposits but if cash gets banned then things become more complicated.
No, literally every investment product, from government bonds to CDs, also plays that part. Cash is just the most significant counterweight to negative deposit rates.
(After taking into account fees, many depositors pay a negative rate to maintain banking privileges.)
This isn't strictly true in Australia. Savings accounts where short term savings go typically provide 1 to 1.5% interest after adjusting for inflation (i.e 2% interest account with Australia's 1% consumer price index). If you don't have a mortgage or credit card debt, having money in an Australian bank savings account is usually a net positive.