Investor fears converge on bank stocks as sell-off spreads + MORE Feb 12th

Banks have been under pressure as a result of loan exposure to the energy sector but now negative rates pose a new threat to profits

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Yellen: Too early to determine impact of global developments
WASHINGTON (AP) — Federal Reserve Chair Janet Yellen cautioned Thursday that global economic pressures pose risks to the U.S. economy but said it’s too soon to know whether those risks are severe enough to alter the Fed’s interest-rate policies.
Yellen said the Fed will determine at its next meeting in March how much economic weakness and falling markets around the world have hamstrung U.S. growth. And for a second day, Yellen was asked about the possibility that the Fed would use negative interest rates as a way to give the economy more support.
She repeated that the Fed had studied the prospect of deploying negative rates in 2010 but had decided then not to use them to try to boost the economy. But she said the Fed thought it should study the issue again now that other central banks, including in Europe and Japan, are using negative rates to try to step up lending and energize growth.
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Zika virus has phones ringing at pest control, travel firms
NEW YORK (AP) — Some small U…

Panic is spreading across global markets as central banks appear to have exhausted the tools that inflated so many risk assets in the first place

According to a new a report by the Fraser Institute, global interest rates are persistently so very low because there’s not enough borrowers in the world.
Michael Walker, chairman of the Fraser Institute Foundation, writes: “Interest rates in the 29 economies that make up 90% of the world’s GDP are low because—and to the extent that—these economies are experiencing a dearth of borrowers and hence a relatively high saver-to-borrower ratio.”
Walker states that in order for central banks to continue to use interest rates as an effective monetary policy tool, the balance between supply and demand—saver and borrower—needs to be maintained. “The fact is that every saver who wants to earn a return needs a debtor as an accomplice,” states Walker in his report, released early this morning. “Because of the anonymity of financial institutions, the connection [between saver and debtor] is not appreciated and indeed most people taking a loan or a mortgage think they are getting it from the bank or credit union…

It’s no longer 2009 when banks could bolster markets. The laws of diminishing returns have clearly set in