Economics
How Much Will You Pay to Park Cash as Central Banks Go Negative?
A European Central Bank study in 2012 estimated the social cost of private cash transactions at 2.3 cents for every euro, suggesting a tolerance for even lower negative rates.
Photographer: Chris Ratcliffe/BloombergThis article is for subscribers only.
Central banks are stooping to new lows to conquer weak inflation.
The monetary guardians of the euro area, Switzerland, Sweden and Denmark are now imposing negative interest rates on bank deposits or on funding operations that feed through to the real economy. Analysts at Commonwealth Bank of Australia reckon almost a quarter of worldwide central-bank reserves now carry a negative yield.