BlackRock boss Fink warns negative interest rates could hit, not help, growth
Larry Fink, the head of the world's largest asset manager BlackRock, has said negative interest rates could hit economic growth instead of encouraging it.
In a letter to BlackRock shareholders published on the company's website, Mr Fink said not enough attention is being given to the effect low rates have on people's ability to plan for the future.
He said a 35-year-old looking to make $48,000 a year in retirement income from the age of 65 would have to save three times as much when rates are at 2pc, compared to when they are at 5pc.
"This reality has profound implications for economic growth: consumers saving for retirement need to reduce spending if they are going to reach their retirement income goals and retirees with lower incomes will need to cut consumption as well," he said.
"A monetary policy intended to spark growth, then, in fact, risks reducing consumer spending."
Negative interest rates, which see savers pay to keep money in a bank, have been introduced in a number of countries in an effort to boost spending. Typically they see banks charged to hold money on deposit at central banks, with the potential for the cost to be passed on to consumers.
Fink's comments come after the IMF warned that there were limits on how far negative rates could go, saying banks could be tempted to lend riskier loans to counteract the rates' effect on profit margins.