Negative Interest Rates




What Can Go Wrong?
• Rate and Default Interaction
• Impairment to the Banking System
• Massive challenges to the Insurance Industry and Pension Funds
• Central Banks cannot force institutions to lend or creditworthy borrowers to borrow
• Huge overhang for refi in next 5 years
• “Negative Rates Cannot Cure Problems that Caused Rates to go Negative”

Author(s): Prof. Robert Jarrow, Donald R. van Deventer, Martin Zorn

Publication Date: 22 July 2020

Publication Site: Kamakura Corporation