Negative Interest Rates and Malaysian Bank Case Study - Accounting and Finance Assignment Help

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BACKGROUND:
 

Since the global financial crisis in 2008, the world has seen the interest rates on the decline and in some countries, below zero. Sweden was the first major economy to experiment with negative interest rates in 2009 and its main policy rate has been below zero for more than four years. The European Central Bank introduced its negative interest rate policy in 2014, while the Bank of Japan unexpectedly did the same in January of 2016. German government bonds with maturities going out to 30 years now trade with negative interest rates. UBS Group AG, Switzerland, plans to charge an annual fee of 0.6% for some wealthy clients to hold their money. In Denmark, a bank is selling, for the first time, a mortgage-backed note that carries a negative coupon. In the US, negative interest rates used to be unthinkable, but not anymore. “Markets expect central banks – not just in advanced economies but also in emerging markets – to go on a loosening tear, cutting more than 1,000 basis points in interest rates worldwide over the next year” (El-Ariani, 2019). If Malaysia happens to be one of the countries that introduce the negative interest rates, what effects do you think that would have on Malaysian banks and their stock price? Would the effects, if any, be different on other company stocks?

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