A final manifestation of costs is the possibility that negative rates hurt banks, as well as money market funds and other non-bank financial institutions such as insurance companies, with no clear payoff in terms of economic growth.
For example, in a recent survey conducted by the ECB, banks estimated that the most important effects from negative rates include lower net interest income and lending rates, as well as squeezed loan margins. The estimated impact on lending volume is minimal. 5 These imbalances and pressures could set the stage for significant disruptions to the functioning of markets down the road.