Negative rates do have a role to play in the central bank tool box, but not to stimulate the economy
That's according to Helge Pedersen, chief economist at Nordea bank in Copenhagen
- Says they can work to help defend a currency regime
- "We have learned that a negative interest rate is a tool that works to weaken one's currency but it doesn't work to stimulate lending
- In Denmark, the negative interest rates have worked because the goal was to defend to currency policy"
Bad news for the ECB and BOJ, then :-(
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There are also comments on the impact on banks and where they have managed to generate more income in the face of negative rates. Bloomberg for more.
