Impact of negative interest rates interest rates for NAB

Abstract

Historically, nominal interest rates have always been positive. However, in the aftermath of the financial crises in 2007/2008, interest rates have decreased substantially. At some point, against all expectations, interest rates have crossed the line into negative territory. The venture, first implemented by the European Central Bank (ECB) in large scales, quickly affected other major economies, including Switzerland. Generally speaking, countries’ primary motivation for implementing such an expansionary monetary policy is to strengthen inflation and to boost economic growth.