, Columnist
Who's Afraid Of Negative Rates?
CEOs have ways of limiting the pain of central-bank cuts
This article is for subscribers only.
Negative interest rates are, in theory, bad news for all banks, turning the business of charging borrowers and rewarding depositors on its head. But CEOs, already grappling with market turmoil, can't simply blame policy makers.
As damaging as rock-bottom rates have been to average net interest income in the euro zone, and with the European Central Bank threatening to take the deposit rate deeper into negative territory, it's hard to say that banks have been powerless to cope. A look at individual banks in countries with negative rates, from the euro area to Switzerland and Scandinavia, shows the damage has been far from widespread.