Why does it matter if a Central Bank has a negative rather than 0% interest rate?
That is kind of the point, one of the hopes is that it incentivizes banks to stop storing money and start injecting it into the economy themselves. Compared to the European Central Bank investing directly into the economy the way the US central bank has been doing. (The Federal Reserve buying mortgage backed securities) On a country level, individual European countries have tried this before in recent times with no noticeable effect.
Central Banks always controlled by politics.  Bush Jr. told Greenspan that he needed to be reelected, and all Greenspan could do was lower interest rates to help, and that fueled more speculation by the commercial bankers.  The president appoints the fed chairman, so dont tell me that they are independent of politicians.    the whole notion that a central banker must be independent of the government force is fuking insane.  You let private bankers control your monetary policy and you lose your nation's sovereignty.  I'd rather put my trust to elected officials than unelected private financial mercenaries.   Nationalize the FED. Considering I'm putting 30% down and having my father cosign is there   any chance I would be turned down for a loan on a $100k car? According to BankRate, the average credit score needed to buy a new car is 714, but they also show average interest rates at 6.39% for new-car loans to people with credit scores in the 601-660 range. High income certainly helps offset credit score to some extent.  Not every bank/dealership does things the same way. Being self-employed you'd most likely be required to show 2 years of tax returns, and they'd use those as a basis for your income rather than whatever you have made recently. If using a co-signer, their income matters. Another key factor is debt to income ratio, if too much of someone's income is already spoken for by other debts a lender will shy away. So, yes, there's a chance, given all the information we don't know and the variability with lender policies, that you could be turned down for a car loan. How should I go about this? If you're set on pursuing the car loan, just go talk to some lenders. You'll want to shop around for a good rate anyway, so no need to speculate just go find out. Include the dealership as a potential financing option, they can have great rates. Personally, I'd get a much cheaper car. Your insurance premium on a 100k car will be quite high due to your age. You might be rightly confident in your earning potential, but nothing is guaranteed, situations can change wildly in short order. A new car is not a good investment or a value-retaining asset, so why bother going into debt for one if you don't have to? If you buy something in cash now, you could upgrade in a few years without financing if your earning prediction holds and would save quite a bit in car insurance and interest over the years between. Is there not some central service that tracks current currency rates that banks can use to get currency data? Sure.  But this doesn't matter.  All the central service can tell you is how much the rate was historically.  But the banks/PayPal don't care about the historical value.  They want to know the price that they'll pay when they get around to switching, not the last price before the switch.  Beyond that, there is a transaction cost to switching.  They have to pay the clearinghouse for managing the transaction.   The banks can choose to act as a clearinghouse, but that increases their risk.  If the bank has a large balance of US dollars but dollars are falling, then they end up eating that cost.  They'll only take that risk if they think that they'll make more money that way.  And in the end, they may have to go on the currency market anyway.  If a European bank runs out of US dollars, they have to buy them on the open market.  Or a US bank might run out of Euros.  Or Yen.  Etc.   Another problem is that many of the currency transactions are small, but the overhead is fixed.  If the bank has to pay $5 for every currency transaction, they won't even break even charging 3% on a $100 transaction.  So they delay the actual transaction so that they can make more than one at a time.  But then they have the risk that the currency value might change in the meantime.  If they credit you with $97 in your account ($100 minus the 3% fee) but the price actually drops from $100 to $99, they're out the $1.   They could do it the other way as well.  You ask for a $100 transaction.  They perform a $1000 transaction, of which they give you $97.  Now they have $898 ($1000 minus the $5 they paid for the transaction plus the $3 they charged you for the transaction).  If there's a 1% drop, they're out $10.98 ($8.98 in currency loss plus a net $2 in fees).   This is why banks have money market accounts.  So they have someone to manage these problems working twenty-four hours a day.  But then they have to pay interest on those accounts, further eating into their profits.  Along with paying a staff to monitor the currency markets and things that may affect them. "Great topic, as interest rate swaps are one of the most commonly used derivatives by bank. In the simplest form, an interest rate swap is an exchange of payments between two parties.   Say party A has a $100 loan with a fixed 4.25% interest rate, and party B also has a $100 loan with a variable rate, lets say prime plus 1% (prime is 3.25, so B is also paying 4.25%).   Party A thinks interest rates are going to go lower and wants to lower his interest expense, while party B is a small company and doesn't want to be exposed to variable interest rates and needs to have a steady cash flow to project his budget.  Party A and B agree to enter into an interest Rate swap for a notional amount of $100 where Party A agree to pay B prime plus 1% (fixed for floating) and party B agrees to pay A 4.25% (floating for fixed) for some period of time they agree upon (usually the maturity of the loan).  Now from the start, the swap has a market value of $0, since A and B both receive the same as they are paying. As interest rates move, the value of the swap moves. Say interest rates fall, and prime is now 2%. B still pays 4.25% to A (he agreed to pay a fixed 4.25% no matter what) and A only pays 3% (prime plus 1%) to B. Remember the terms of the individuals loans did not change, so A owes $4.25 to his bank and B owes $3 to his bank. Party A uses the $4.25 from B to pay his bank, and pays $3 to B. Party A has lowered his interest expense by $1.25 and his position is considered ""in-the-money"", which means he is benefitting from the transaction. Party B gets $3 from A but still owes his bank $4.25. In reality, the transaction nets out to B paying A $1.25, rather than both A and B paying each other different amounts. B is ""out-of-the-money"" because in aggregate he is paying A. The market value of the swap would be the present value of that $1.25 benefit A receives, discounted using expected future interest rates (the same number but negative is the value to B).  Please ask if you have additional questions or need clarifications." The answer is far more simple.   The purchasers of periphery debt have been banks in the periphery. Since these countries don't have a central bank, their private banks were swallowing the national debt since nobody else wanted to touch it.   When the market value of that debt plummets, the banks have massive holes they need to fill on their balance sheets to fulfill capital requirements and solvency. Therefore, the banks themselves need to be injected with liquidity.  Now you can see why its a reiterative problem. Because they believe that negative interest rates will force people to push capital around, and promote investment to avoid the negative interest rates associated with having your cash sitting in an account. Most likely they will be banning cash within the next 10 years anyway which will prevent you from being able to keep it yourself. You will either need to: or The MIRR formula uses the finance rate to discount negative cash flows, but since the only negative cash flow in the example in in the current period, there's nothing to discount.  It's meant to solve problems with IRR like when there are both positive and negative cash flows, which can result in multiple answers for IRR.  The example they give isn't a good one for MIRR because it's a simple spend now, earn later scenario, which IRR is perfectly fine for. If you add a negative cashflow somewhere after the first one you'll see the answer change with difference financing rates. What you are asking about is called Interest Rate Parity. Or for a longer explanation the article Interest Rate Parity at Wikipedia.  If the US has a rate of say zero, and the rate in Elbonia is 10%, one believes that in a year the exchange rate will be shifted by 10%, i.e. it will take 1.1 unit of their currency to get the dollars one unit did prior.  Else, you'd always profit from such FOREX trades.  (Disclaimer - I am not claiming this to be true or false, just offering one theory that explains the rate difference effect on future exchange rates.