Something Is Rotten in the Banks of Denmark... Pardon, of the World!
Aug. 13, 2019 (EIRNS)—A Danish bank is now offering mortgage loans at negative rates: Jyske Bank will offer 10-year mortgage bonds at a fixed rate of −0.5%. This occurs amid an unprecedented wave of mortgage refinancing: In July, borrowers refinanced $28 billion worth of mortgages for a 30-year, 1% fixed rate. The central bank of Denmark has had negative central bank rates longer than any other country, according to the Australian Financial Review, in the effort to peg the Danish krone to the euro.
Negative rates have already destroyed the credit sector, making it impossible for commercial banks to produce earnings by traditional activities of savings deposits and loans. The belated effort by Deutsche Bank to leave investment banking and return to commercial banking is therefore doomed to fail.