Switzerland’s Likely Rate Cut to Zero Threatens to Test Banks

The Swiss National Bank’s next cut in borrowing costs may be about to cause a headache for banks, if officials end up experimenting with their first-ever interest rate of zero.

A quarter-point reduction anticipated by most economists on Thursday would not only draw a line on less than three years of positive monetary policy, but would also place the financial system in unchartered territory by stopping short of going negative, conceivably for some time to come.