Negative interest rates in Switzerland: What have we learned?

Jean-Pierre Danthine

PSE-Ecole d'économie de Paris (Postprint) from HAL

Abstract: The Swiss National Bank introduced negative interest rates of minus 75 bp in mid‐January 2015. Large exemptions on commercial bank holdings at the Swiss National Bank result in the average rate being significantly less negative than the marginal rate. With this constellation the policy transmission to the real economy is asymmetric. It fully satisfies the needs of a small open economy in search of a negative interest differential, not those of an economy aiming at a "classical" monetary stimulus at the zero bound. While the Swiss design would make it possible to impose rates that are significantly more negative with modest complementary features, the unpopularity of negative rates makes it likely that the ambition to totally free monetary policy of the ZLB will, in the near future, be thwarted by democratic realities.

Date: 2018
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Citations: View citations in EconPapers (6)

Published in Pacific Economic Review, 2018, 23 (1), pp.43 - 50. ⟨10.1111/1468-0106.12251⟩

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Related works:
Working Paper: Negative interest rates in Switzerland: What have we learned? (2018)
Working Paper: Negative interest rates in Switzerland: What have we learned? (2017)
Working Paper: Negative interest rates in Switzerland: what have we learned? (2017)
Working Paper: Negative interest rates in Switzerland: what have we learned? (2017)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:pseptp:halshs-01802641

DOI: 10.1111/1468-0106.12251

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