Chart 6: Most banks have introduced negative deposit rates for households THE RESPONSE OF FIRMS AND HOUSEHOLDS In Danmarks Nationalbank, we have analysed how Danish firms and households have responded to negative deposit rates. We find that when a firm is exposed to negative deposit rates, it increases the likelihood that the firm will move its deposits to another bank.
6 Moreover, it becomes more likely to repay debt. The effect of negative rates is not limited to financial decisions. Firms that are charged negative deposit rates also increase employment and investment in fixed capital compared to other firms. These findings suggest that the response of firms to changes in deposit rates is non-linear at zero.