Penalty interest (penalty rate)

The price paid by the central bank in extraordinary cases to banks to break up a liquidity bottleneck. – Also popularly used to refer to the early repayment penalty, i.e. the fee charged by banks if a loan agreement is repaid by the customer before the end of the agreed term. – A payment of x percent that self-reporting tax evaders (tax evaders) are required to make on the total amount concealed from the tax authorities in subsequent taxation (tax arrears). – A special interest rate charged by a central bank for falling below the reserve requirement. – An interest payment that creditors add to the amount owed when payments are late: default interest. – See bail-out, money market operations, money lender of last resort, negative interest rate, panic selling, prenumeration reservation, default surcharge, debt restructuring bubble.

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University Professor Dr. Gerhard Merk, Dipl.rer.pol., Dipl.rer.oec.
Professor Dr. Eckehard Krah, Dipl.rer.pol.
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