The Washington Post: Banks are paying people to borrow money. That’s alarming news for the global economy.

The Washington Post, August 14, 2019: Banks are paying people to borrow money. That’s alarming news for the global economy.

For Americans accustomed to paying 4% or 5% mortgage rates, let alone the double-digit figures consumers endured in the early 1980s, the new loan from Denmark’s Jyske Bank might seem inconceivable.

The Danish lender last week started offering home buyers 10-year mortgages at an interest rate of -0.5%. That means borrowers over a decade will pay back a little less than the amount borrowed, not including one-time fees.

This highly unusual condition may be good for Danish home buyers, but economists say it’s an alarming sign for the global economy. Several major governments and more than 1,000 big companies in Europe are now able to effectively borrow from global financial markets at a negative interest rate. For Jyske Bank, that means it can turn around and lend money at a subzero interest rate, too.

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