The debate over abolishing interest payments on Bank of England reserves has sparked discussions. Critics argue that such a move would lead to near-zero interest rates on savings accounts, essentially taxing ordinary people's savings. The impact on financial institutions and the UK's fiscal situation has also been highlighted.
The Bank of England is losing over three times more on its quantitative-easing program than the Fed, according to new research https://t.co/RAi6FeKL0m
The Bank of England pays out so much interest on bank reserves that it impacts the UK’s fiscal situation. This is part of the overall “fiscal dominance” situation, and is common to many countries, but accounting treatments differ. https://t.co/FvGUKOAqzv
The Bank of England and interest on its reserves enters the election debate https://t.co/gMVEXmvEW6
One point I feel is under-discussed in the debate about abolishing interest paid on BoE reserves, is that many of the monetary financial institutions that receive the interest are also some of the biggest names in international finance.
To be clear: if the Bank of England stopped remunerating all reserve deposits, interest rates on most savings and current accounts would fall to zero or below. This proposal would therefore amount to a tax on ordinary people's savings. Tax incidence: always follow the money. https://t.co/8m1PfbXxfD
Dear @reformparty_uk, no central bank in the world has completely cancelled interest on bank reserves, as you seem to be intending to do. Cancelling interest on bank reserves and ending QT would mean interest rates falling to zero and staying there. https://t.co/BqfKTivlLv
Dear @reform_Uk, no central bank in the world has completely cancelled all interest payments on bank reserves, which is what you appear to be proposing to do. https://t.co/GoSEL5RmkL