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Negative Interest rates: Desperate times, desperate measures

Central banks across the developed world have taken to Negative Interest Rate Policies (NIRP) in a radical attempt to stimulate demand- the idea being that those sitting on assets will be penalized in an attempt to either lend the capital or spend it. The UK’s Monetary Policy Committee (MPC) has not ruled out the idea, but Japan, the European Central Bank, Denmark, Sweden and Switzerland have enacted NIRP already for a variety of reasons; Japan and the ECB in last ditch efforts to stimulate demand, Denmark, Sweden and Switzerland in an attempt to deter foreign investment and stabilize exchange rates. Government yields are negative, although only nominally. A period of stagnant inflation means that yields may yet perk up in time.
So far the policy has yet to restart the economies it has been enacted in, and could even make companies more risk averse. Should the policy ever be passed on to consumers for a prolonged period, there’s a chance that many will simply take to hoarding cash rather than getting penalized in bank accounts, putting further stress on bank balance sheets. More spendthrift consumers may even double their efforts to save in order to make up the balance. When banks absorb the cost of negative rates themselves, the squeezing of margins on lending and deposits rates will also make them less willing to lend, increasing the cost of lending and depriving credit availability.
Denmark has been in negative rates for several years, and has had knock-on consequences for property prices, fearing another bubble- something the UK should heed before it contemplates introducing them. It has yet to stimulate the economy to levels of full employment or stable inflation three years in.
NIRP long-term is an unknown entity as it’s never been done before. Ultimately central banks need to utilize both fiscal and monetary policy to guide economies. Most of its current policies rely on systemically important banks but which have incentives to deviate from desired effects, and thus NIRP is unlikely to resurrect ailing economies.