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Mark Gilbert

Negative Interest Rates Are Destroying Our Pensions

A new survey shows unorthodox monetary policies are eating away at our nest eggs. Relief may be at hand. 

On an upward slope?

On an upward slope?

Photographer: Luke MacGregor/Bloomberg

It’s becoming increasingly apparent that the negative interest rates introduced in several countries in the wake of the global financial crisis are trashing bank profitability. Less obvious, though perhaps more crucial for society as a whole, are their debilitating impact on pension plans. And that’s why the days of sub-zero borrowing costs may be drawing to a close.

Later this week, Sweden’s central bank is poised to abandon the negative interest rate policy it’s pursued for half a decade by increasing its key policy rate to zero even though inflation is expected to remain stubbornly below target for years to come.