In 2015,some banks in Europe had to make interest payments to borrowers rather than receive interest payments from borrowers.Which of the following statements describes this situation?
A)For these banks,the loans increased required reserves.
B)These banks were receiving negative nominal interest rates on these loans.
C)For these banks,the loans were liabilities instead of assets.
D)All of the above are correct.

Question

Quizplus · Accepted Answer

This situation is commonly known as negative interest rates, where borrowers are paid to borrow money instead of paying interest on their loans. This means that banks are receiving negative nominal interest rates on these loans. The other options are not relevant to this situation.

In 2015,some Banks in Europe Had to Make Interest Payments