Interbank Interest Rates

Is the US the only state whose federal bank (the Fed) controls the inter-bank lending rate (called the federal funds rate in the US)? What are the pros and cons of the Bank of England not setting Libor in the same way?

We don't know what interest rates would be if the fed wasn't promising free money to the big banks. My credit union can offer 2.0%, why can't Bank of America or Chase or Wells Fargo? This is no different from the LIBOR manipulation that happened a few years ago. Back then, the media was quick to point out how the LIBOR interest rate impacted everyone from pensioners to savers.

i want to point out just one thing - the problem is not in banks per se, the problem is merely in the expectation that interest rates have to be positive ;)

How are negative interest rates implemented?

I'm sure the people making decisions about interest rates did :)

Surely the interest rate has more to do with the Fed than the bank?

The rate the central bank sets is effectively a floor below which banks will not lend. The effective Federal Funds Rate in the U.S. is around 1.16% The one year Treasury rate is around 1.24%. People and banks are lending money to the government for one year for essentially .08%, and this is not entirely risk free. Rates went negative after the financial crisis, and German bond rates are below Treasuries. If banks could find funding at 0.1% they would make money lending at 0.2% (depending on and

Only the interest rates on money borrowed from the swiss national bank (which only other banks can use) are affected. This will keep the interest rate you get for your private account close or equal to zero, but they will not get below that margin for exactly the reason that people will withdraw their money.

The interest rate at which large banks can borrow USD is officially 0-1% and effectively negative due to massive quantitative easing.

Oh yeah for sure: https://en.wikipedia.org/wiki/Libor