Spanish politicians criticised the ECB for raising interest rates earlier this year, making it more costly for businesses to borrow and invest.
Farmers are carrying less debt than they were 30 years ago, and low interest rates are also a factor because they make it less costly for farmers to borrow.
That means it'll be more costly to GMAC to borrow funds to finance its loan engine than if the auto lender had climbed back to investment grade status, a perch it hasn't occupied since last spring.
If the economy improves as expected, it will become more costly for the government to borrow money, and that cost would be passed on to students.
Andrei Shleifer, a Harvard economist, among others, pointed out that it could be too costly for informed investors to borrow enough to bet against the noise traders.
Standard & Poor's lowered the credit rating of Lucent Technologies to junk-bond status, a move that could make it more costly for the company to borrow money.
Every hedge fund that speculated against a bank by purchasing credit-default swaps on its bonds signaled skepticism about the bank's creditworthiness and helped to make it more costly for the bank to borrow, and thus to issue loans.
Higher interest rates will also make it more costly for the government to borrow money to feed the extensive spending projects that have helped keep Japan's economy from faltering even further over the last decade.
Now there are signs that these concerns are, in turn, making it harder and costlier for the banks to borrow money to finance their day-to-day operations, a troubling trend that, at the worst, could lead to liquidity problems.
Raising interest rates should encourage depositors to hold more money in their accounts and make it slightly more costly for individuals and corporations to borrow from banks, which would help reduce spending and ease upward pressure on prices.
