Skip to content
Subscriber Only

World’s Longest Trial of Negative Rates Shows Lots of Positives

Doomsday predictions are turned on their head as Denmark prospers
Pedestrians sit on the side of the harbor canal opposite residential buildings in the Christians Havn district of Copenhagen, Denmark, on Thursday, March 13, 2014. Denmark's central bank, the country's financial regulator, and international credit-rating companies have warned since at least 2009 that so much one-year debt makes the $550 billion market vulnerable to a sharp decline in investor demand.
Photographer: Freya Ingrid Morales

There was a time when people wondered what horrors might follow if central banks resorted to negative interest rates. But the country that’s tested the policy longer than any other has lately been enjoying one economic triumph after another.

The central bank of Denmark first drove its benchmark deposit rate below zero in 2012, in defense of the krone’s peg to the euro. Since then, savings have hit an all-time high, unemployment’s the lowest in almost a decade and government coffers are bulging. The country’s largest bank is also enjoying the biggest profits in its history and the property market is booming.