Europe in 2008 and Negative interest rates 2014–2022 in 2011, And rates went negative after the
European debt crisis The
European Central Bank and central banks of other European countries, such as Sweden, Switzerland, and Denmark, have paid negative interest on excess reserves—in effect taxing banks for exceeding their
reserve requirements—as an expansionary monetary policy measure. Negative rates in Europe have been controversial. Ambrose Evans-Pritchard of the London Telegraph has described them as a "calamitous misadventure". Economists for the European Central Bank argue that across the
euro area, loans from banks to corporations have become less expensive since negative rates were adopted. Negative interest policy started in 2016 In January 2016, the
Bank of Japan followed European central banks and lowered its interest rates below zero, after several years of keeping them at the lower end of the positive range. The existing balances will keep on yielding a rate of 0.1 percent; the reserves that banks are required to keep at the BOJ will have a rate of zero percent, and a rate of minus 0.1 percent will be applied to any other reserves.
United States The staff of the
U.S. Federal Reserve prepared a memo for the
Federal Open Market Committee in August 2010 evaluating the possibility of lowering the interest rate that the Fed paid on bank reserves to zero or below. The staff was lukewarm on the idea, and it was never adopted in the U.S. Former chairman of the Federal Reserve
Ben Bernanke has argued that "negative rates appear to have both modest benefits and manageable costs" and "modestly negative" interest rates should be an option for the Fed to consider if it ever again confronts a very weak economy at a time when short-term interest rates already have been cut to zero.{{cite web|last=Bernanke|first=Ben|title=What tools does the Fed have left? Part 1: Negative interest rates ==See also==