The Wall Street Journal reports on why central banks are now charging citizens to hold onto their cash:
France joined a handful of euro-zone countries Monday in selling short-term debt at negative interest rates as investors seek alternatives to expensive German and Dutch debt.
Earlier in the day, Germany’s six-month borrowing costs again turned negative at an auction, after the European Central Bank slashed its key policy and deposit rates to unprecedented levels last week.
The negative yield at Monday’s German auction, the lowest on record in this maturity segment, means that investors effectively pay the German state for the privilege of holding its debt.
The Dutch State Treasury Agency had already sold Treasury Certificates, or short-term debt, at negative yields. Now the French government is doing so as well.
Several large money-market funds restricted or closed their European funds to new investments after the ECB cut the deposit rate to zero, as they have struggled to provide returns to investors.