What are two conflicting issues that the European central banks that experimented with negative interest rates found that they eventually had to balance?

Question

Amaya Bonilla

Social Studies

23 January, 20:13

What are two conflicting issues that the European central banks that experimented with negative interest rates found that they eventually had to balance?

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Answers (1)

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Nathalie · Answer 1

The two conflicting issues were wanting to increase loans but a smaller pool of excess reserves

Explanation:

The European Central Bank (ECB) last Thursday cut its deposit rate, bringing it further into negative territory. The change isn't without precedent. Sweden's Riksbank was the first central bank to use negative interest rates to stimulate its economy in 2009, with the ECB, Danish National Bank, Swiss National Bank and the Bank of Japan, all following suit this past January.