Credit: Spencer Platt/Getty Images
![](https://unherd.com/wp-content/uploads/2019/09/Peter-F-100x100.jpg)
Periodically, I write about interest rates. That’s because what’s happened to them – the fact that they’ve been reduced to near zero on a seemingly permanent basis – is a really important, through under-reported, story. Perhaps I also feel sorry for them.
Interest rates used to be big news – capable of grabbing headlines with every move up or down. But now that they’re on the floor, no one wants to know – the news just steps over them, looking for where the action is.
Interest rates aren’t dead, of course, only sleeping. Indeed, economic policy has become a dream world, filled with financial phantasmagoria like quantitative easing and inverted yield curves. And there’s fevered talk of even stranger stuff – like Modern Monetary Theory, People’s QE and ‘helicopter money’.
And yet the weirder it gets, the more disconnected it becomes from mainstream politics – and thus democratic accountability. In the past, when interest rates (as in central bank base rates) were significantly higher than zero and liable to substantial cuts and hikes (sometimes by entire percentage points!), voters paid attention because each change had a direct and understandable impact on things that people cared about – like whether they could make that month’s mortgage payment.
These days, however, esoteric policy instruments like QE lack relatability and thus don’t get the attention they deserve.
Ultra-low interest rates have all sorts of nasty side effects that impact upon us all. Previously on UnHerd, I took a look at what they do to the corporate sector (they make big businesses bigger and lazier), but today I want to focus on the banking sector and a great Bloomberg article on the subject by Satyajit Das.
Join the discussion
Join like minded readers that support our journalism by becoming a paid subscriber
To join the discussion in the comments, become a paid subscriber.
Join like minded readers that support our journalism, read unlimited articles and enjoy other subscriber-only benefits.
Subscribe