[xorfish]

You still have to pay the interest on the loan.

If your bond 10y bond you bought two years ago pays 1.5% and you need to take on a loan at 3.5% for 8 years to be liquid, then you are still around 16% in the red. You will find that this is also roughly what the market will discount the bonds.

[twblalock]

The loans we are talking about are from the government and don't need to stick to market rates if the government doesn't want them to.

[kgwgk]

Having the government give zero-interest loans doesn’t quite satisfy the “won’t cost anything to taxpayers” part, does it?

[jkhdigital]

And where does the government get the money to lend to the bank? Right, it issues Treasury debt for which it pays a market-determined rate of interest. In other words, taxpayers would be subsidizing any below-market rate loans.