German lifeÂ! insurers, for instance, are caught in a pinch that could eventually threaten their survival. Regulators are forcing them to boost capital levels at the same time that low rates make it hard to make money with their investments.
It has been nearly four years since Denmark entered the world of negative monetary policy, and borrowers and lenders alike are still trying to make sense of the upside-down world it has brought. In some cases, homeowners are getting paid interest on their mortgages. The European Central Bank and the Bank of Japan, grappling with stagnant economies, are also using subz! ero rates to stimulate growth. Japan’s two-month experiment with negative rates is producing some unexpected results. Trading has withered in Japan’s money markets, where big banks and others usually park their excess cash hoping to receive some interest—despite predictions from the Bank of Japan that its latest easing of monetary policy would spark more activity.
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