Negative interest rates, which central banks in several countries have implemented as a way to spur economic growth, is a radical move. In this three-part series, ‘Negative Thinking,’ commentator Satyajit Das examines this policy and the risk it carries.
Several of the world’s central banks have crossed the Rubicon, commencing a high-risk experiment with negative interest rates. The intent is clear: reduce debt by confiscation and transfer wealth from savers to borrowers. This is ultimately an admission of defeat, as traditional means of bringing excessive debt under control have failed.