BOE's van Steenis: Deep Pain in 'Perniciously Low-Rate Environment'

The video explores the effects of chronic negative interest rates, particularly in the eurozone. It highlights the lack of negative rates in the UK and references a study by Professor Charles from the London School of Economics, which critiques the ECB's defense of negative rates. The study points out that negative rates create frictions in the financial system, making banks less profitable and more fragile, hindering their ability to invest in new technologies. The eurozone banking system's low returns are attributed to this challenging rate environment.

What are the potential effects of chronic negative interest rates on the banking system?

What key research piece is mentioned regarding the ECB's negative rate policy?

How does the negative interest rate environment affect the profitability of banks?

What challenges do banks face in passing on negative rates to consumers?

What is the general sentiment expressed about the current low rate environment?