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Questions tagged [central-bank]

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5 votes
2 answers
208 views

In layman's terms, what happens to the average Joe, in a "bank bail-in"?

I've come across some scare stories that a "bail-in", being the opposite of a bail-out, is where a bank uses deposits to restructure their capital, and that the average Joe with savings ...
Stewart's user avatar
  • 169
0 votes
2 answers
94 views

How does QE reduce long-term interest rates? [closed]

It is said to be that, in a QE programme, the Fed reduces long-term interest rates by purchasing long-term securities. How does this work? Why does buying longer maturity securities from banks reduce ...
silverbackgorilla's user avatar
1 vote
1 answer
81 views

How are sovereign bond interest rates determined? [closed]

They are a lot of questions about the price of a bond or its yield. How would bonds fare if interest rates rose? Why would I not buy a bond for less than face value? Why invest in long term ...
politinsa's user avatar
  • 111
2 votes
1 answer
167 views

Trying to understand the U.S. yield curve and global inflation

With the COVID crisis the FED has lower interest rates a lot: Now, inspecting the US yield curve: It seems to be that this is a normal curve that doesn't flatten too much at the end. Is this correct?...
Martel's user avatar
  • 1,281
4 votes
2 answers
838 views

Do central banks really dispose of old currency the way it's shown in movies?

I have watched many movies where people who want to rob a load of money, Just wait until the federal reserve pulls money back to them and right in between them removing the serial numbers from their ...
Joseph Casey's user avatar
3 votes
1 answer
256 views

Why are EU banks hesitant to open an account and take our money?

In Europe, I work for a small/honest internet business. We make a fair profit every month, so we wanted to deposit our profits in different banks, until we decide what to do with the money. To our ...
elemolotiv's user avatar
0 votes
2 answers
68 views

How can I know the current interest rates for corporate bonds?

How can I check the interest rate of a bond issued by a particular company (e.g. GE)? I have found this for instance: GE corporate bonds. According to that, the coupon is ~8%. That sounds impossible ...
Martel's user avatar
  • 1,281
1 vote
0 answers
41 views

How do you assess the value of a central bank?

I have recently stumbled upon a very interesting investment idea. It appears that it is possible to acquire shares in the National Bank of Belgium, which is the central bank of Belgium. Its shares are ...
Snowflake's user avatar
  • 133
2 votes
0 answers
186 views

How much value has the US Dollar lost or gained in 2020, compared to the US Dollar in 2019?

There's a lot of news about the Federal Reserve printing money. I have a hard time imagining the relative change in value of the USD. (or EURO for that matter) I tried to calculate but it's hard: ...
Frank De Smedt's user avatar
2 votes
2 answers
122 views

Are the corporate bonds' interest rates set by central banks?

In countries which use a central bank system: When people speak about the 'interest rates', they mean interest to which the central bank (whatever it is) lends money to other banks, which in turn ...
Martel's user avatar
  • 1,281
-1 votes
1 answer
117 views

How can you explain how international wire transfers work succinctly?

I'm interested in a conceptual explanation at the accounting level, i.e. who owes who what during the process. I couldn't find anything on the web or on YouTube. It's very cumbersome to describe in ...
Graham P's user avatar
1 vote
1 answer
90 views

How much percent of the total Euro Zone Euros was artificially added through systems like QE this century? [closed]

Until 2018, the ECB 'printed' € 2,500,000,000,000 (2.5 trillion) through quantitative easing, and then it proceeded to add € 20,000,000,000 (20 billion) per month "for as long as necessary", which is ...
Redsandro's user avatar
  • 111
1 vote
3 answers
1k views

Can an individual borrow directly from the Bank of England (or any central bank)?

How it normally works is that individuals can apply for loans from high-street banks, who charge an appropriate level of interest. The banks get the money from savers' deposits - and also they may ...
Chris Melville's user avatar
1 vote
4 answers
365 views

Why do banks park their money at the european central bank instead of buying stocks?

Sorry for asking a very very similar question to [1], but I'm still confused why banks would not invest their money in stocks instead of parking it at the central bank and pay the negative interest of ...
Max's user avatar
  • 111
3 votes
3 answers
202 views

Interest rates and what does "discount" mean?

I was reading an article that says "Interest rates play an essential role in financial markets. Foremost, they represent the rate at which investors discount risk-free as well as risky future cash ...
noplace's user avatar
  • 163
0 votes
3 answers
119 views

Do personal loans interest rates change based on central bank's interest rates?

I have read that the central bank has an interest rate which affects the rate at which banks borrow and lend federal reserves to one another. What I am confused about is how the central bank's ...
Christopher U's user avatar
3 votes
0 answers
73 views

Are Fed repo operations done through the discount window?

Recently the Fed performed repo operations to keep the effective Fed funds rate down and close to its target. Is this the usual way banks get loans from the discount window, using treasuries as ...
Jonah's user avatar
  • 543
1 vote
1 answer
117 views

How has the Fed been reducing its balance sheet?

I understand the Fed has been letting its treasury securities mature without reinvesting in new ones, but does the Treasury actually pay the Fed the principal? That is, does the Treasury's reserve ...
Jonah's user avatar
  • 543
55 votes
2 answers
8k views

Why do banks “park” their money at the European Central Bank?

I regularly read that the European Central Bank charges a negative interest rate on money that banks park there. But why would a bank put their money to the Central Bank then? Can't they just keep it ...
Martin Ueding's user avatar
1 vote
2 answers
184 views

What happens when the bonds bought with QE default?

QE happens when central banks buy (crap) bonds from financial companies, giving them liquidity to buy better assets. Consequently boosting the stock market as we have seen. But what happens if these ...
coiso's user avatar
  • 159
2 votes
4 answers
594 views

European banks, low interest rates and "free money" for home owners?

Where I live in Scandinavia and across Europe, interest rates are very low. More and more people are using the rising value of their home to draw out money. I would almost call it "free" money when ...
vikingsteve's user avatar
2 votes
3 answers
446 views

How to measure a currencies valuation or devaluation in relevance to itself

Usually when currencies are devalued, the percentage change is given in relevance to USD or EUR. Is there a way to measure the currencies change in value to itself or to all the world's currencies ...
user avatar
2 votes
1 answer
165 views

What does it mean that People's Bank of China has transitioned "from wealth to currency management"?

A note from a Deutche Bank strategist quoted in this article says that: ...we estimate that the pound’s share has likely fallen from close to 10% into low single digits since early 2015 (chart 2),...
SherlockEinstein's user avatar
2 votes
3 answers
16k views

Depositing or cashing a $2 Million check [duplicate]

I would like to ask you the question. Will 2 millions dollars check to be cash? and How long will 2 millions dollars check to be cash? I understand, but the 2 millions dollars check from the ...
Carolyn's user avatar
  • 47
1 vote
2 answers
217 views

Savings account with fixed interest or not?

Me and my wife are renting our apartment and we're both students with part time jobs. We are saving up for a condo more suitable to our needs, we would like to have our down payment within five years. ...
pimmen's user avatar
  • 141
7 votes
2 answers
377 views

How do reserve banks influence home-loan interest rates?

On the First Tuesday of every month the board of the RBA (Reserve Bank of Australia) meets and sets the target for the cash rate. I understand that they are trying to adjust the amount of money ...
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