Key issues

Low interest rates: for how long?

The cost of negative rates: the case of the Riksbank

• The experience of the Riksbank highlights the doubts over negative interest rates: despite a worsening economic outlook for Sweden, it raised the interest rate from –0.25% to 0% in December and abandoned its policy of negative rates. The ECB’s immersion into more negative interest rates (with a cut from –0.40% to –0.50% last September) coexists with the uncertainty over whether this policy is effective. In theory, there is no law against (slightly) negative rates, which can be transmitted to the economy in the same way as positive ones ...