Banks and Negative Interest Rates

In this article, we review the nascent literature on transmission of negative policy rates. We discuss theory how depends bank balance sheets, and changes once rates become negative. growing evidence that are special because pass-through to banks’ retail deposit is hindered by a zero lower bound. summarize existing research impact lending securities portfolios as well their consequences for real economy. Finally, role different initial conditions when rate becomes negative, potential interactions between other unconventional monetary policies.