In previous articles, we have outlined in great detail the many faults of the current monetary policy direction of major central banks and the large-scale economic impact of keeping interest rates artificially low. Among the worst offenders is the ECB, that is unapologetically persistent on continuing this exercise in absurdity that are negative interest rates. Over the last few years, the effects of this decision have been felt by pensioners and by responsible, conservative investors, who were forced to increase their risk in order to achieve reasonable returns. However, by now, we start to see the real-life implications and practical consequences of this policy direction affect every single normal citizen with a savings account.
Zero interest on savings accounts
Overall, saving accounts in Europe have been increasingly plagued by constantly diminishing interest rates and Switzerland is no stranger to this issue either. In fact, as the SNB is rejecting calls by economists and shareholders to rethink its stance after over four years and instead persists on its negative interest rates policy (NIRP), the toll on savers, the banking sector and pension funds is only getting worse.