Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/237688 
Year of Publication: 
2021
Series/Report no.: 
ECB Working Paper No. 2549
Publisher: 
European Central Bank (ECB), Frankfurt a. M.
Abstract: 
In this paper, we survey the nascent literature on the transmission of negative policy rates. We discuss the theory of how the transmission depends on bank balance sheets, and how this changes once policy rates become negative. We review the growing evidence that negative policy rates are special because the pass-through to banks' retail deposit rates is hindered by a zero lower bound. We summarize existing work on the impact of negative rates on banks' lending and securities portfolios, and the consequences for the real economy. Finally, we discuss the role of different "initial" conditions when the policy rate becomes negative, and potential interactions between negative policy rates and other unconventional monetary policies.
Subjects: 
deposits
negative interest rates
zero lower bound
bank lending
bank risktaking
euro-area heterogeneity
JEL: 
E44
E52
E58
G20
G21
Persistent Identifier of the first edition: 
ISBN: 
978-92-899-4549-3
Document Type: 
Working Paper

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