Summary of Banks are paying people to borrow money. That’s alarming news for the global economy.

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Banks are paying people to borrow money. That’s alarming news for the global economy. summary

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In early August 2019, a Danish bank began to offer 10-year mortgages at negative interest rates, which means that people will end up owing less than what they borrow. That sounds terrific for potential homeowners but terrible for banks and, potentially, the global economy. In this eye-opening article, journalist David J. Lynch explores how this topsy-turvy world of below-zero interest rates is working now in Europe and Japan, and why it could happen in the United States as well.

About the Author

David J. Lynch is a financial writer for The Washington Post.

Summary

Investors are now lending money at negative interest rates.

In August 2019, a Danish bank began, in effect, paying people to take out home mortgages. Those who take out loans at negative interest rates will pay back less than what they borrow. Governments and companies across Europe already borrow money at negative interest rates. Issued as bonds, this kind of debt now amounts to $15 trillion worldwide.

Amid fears that the world is moving toward a recession, several countries – including Japan, Germany and France – as well as some major...


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