Negative Rate Territory

Several central banks have pushed rates below zero, a move that once seemed impossible. Negative rates mean banks pay to park money at the central bank, which is meant to push them to lend instead.

The European Central Bank kept negative rates for years, effectively charging banks to hoard cash so money would flow into lending and investment rather than sit idle.

Results were mixed. Lending rose somewhat, but bank profits suffered and savers faced punishing conditions. Extremely low rates, it turned out, bring diminishing returns and distortions that are hard to unwind.