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Negative rates: are central banks opening Pandora’s Box?

The Bank of Japan (BoJ) has followed central banks in Denmark, the Eurozone, Sweden and Switzerland by imposing a negative interest rate on a portion of commercial bank reserves. In Switzerland and Sweden, the main policy interest rate, as well as the marginal rate on reserves, is below zero. Short-term interbank interest rates are negative in all five cases – see charts.
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