But once policy rates fall too far into the negative zone, i.e. below the costs of holding cash, people will start 2  BIS central bankers’ speeches  to hoard money instead of holding the negative yielding deposits.
At this point, cash will be held by people merely as a store of value, indistinguishable from bonds, banks will be left with less deposits and the economy with fewer loans. 1.4  Potential risks from negative rates policy  There are, however, a number of concerns associated with the use of negative interest rates, each of which is considered in turn. I.