Negative Rates No Threat to Bank Health, Danish FSA Says

Denmark’s experience with negative interest rates shows the policy won’t undermine bank industry health and even allows lenders to set themselves up for a rebound, according to the Financial Supervisory Authority.

Since the Danish central bank cut its deposit rate below zero in July, net interest income at the nation’s lenders has dropped to its lowest in five years. Yet the figures show a temporary effect that won’t leave lasting scars on the industry, said Ulrik Noedgaard, director general of the FSA.