Multi-tier systems have been in place for some time in European countries. Under the multi-tier system in Japan, a zero interest rate and a positive interest rate apply to financial institutions’ current account balances at the Bank of Japan up to certain thresholds (Chart 6). Let me explain how the Bank’s three-tier system works.
First, the same interest rate as before – a positive rate of 0.1 percent – is applied to financial institutions’ current account balances already held at the time of the introduction of the negative interest rate policy.