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When negative yields are fine

More and more govt bonds in the eurozone are trading at negative yields. And yet, when asked who will sell their bonds to the ECB, few market participants appear keen to do so. Has the world gone mad?

Money in a bank is more convenient and actually more liquid than money in a vault or a hole in the ground.

THE European Central Bank (ECB) has started its QE. What will happen to yields in the eurozone? It is tempting to look at what happened in the United States. The Federal Reserve started its first QE programme towards the end of 2008.

Chart 1 shows that 10-year Treasury yields fell sharply

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