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Jakobsen: The dangers of negative rates
The ECB's Mario Draghi has attempted to play down speculation the European Central Bank may introduce negative deposit rates. There's "no news" he said. Saxo Bank's Chief Investment Officer says such a move would be potentially dangerous. Not only is there little evidence it would force banks to lend, he says it would upset the day to day management of money market funds.
Steen says cutting rates to below zero would be a desperate measure. Although countries such as Denmark and Sweden have gone down that road, this would be new territory in monetary terms because the ECB has such wide powers. Investors should take great care. He senses that we're now entering "frothy" territory in terms of equity valuations and there are too many single risk events that concern him right now to be fully engaged in long equity.
02:01 minutes
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