From the Financial Times, Japan's interest rates fall below zero:
Japanese interest rates have fallen below zero for the first time in the country's history.This is cool! Charge customers to take their money and then pay someone to borrow it!
The overnight call rate on Y15bn (£79m, $123m, €113.6m) of funds traded between foreign banks fell to minus 0.01 per cent. The lender was Dutch bank ABN Amro and the borrowers were French bank Société Générale and BNP Paribas, according to marketsources.
The negative rate means that Société Générale and BNP are, in effect, being paid to borrow funds as they find themselves in the fortunate situation of having to pay back less than they were lent.
ABN Amro could also potentially profit from the deal as some foreign banks are able to obtain funds at a negative rate.
Fears over the solvency of Japanese banks have led many Japanese citizens to prefer depositing funds in large overseas banks. As a result, foreign banks have been able to charge customers to take deposits.
