27  Legal and technical challenges have been addressed ​Mortgage: Negative interest rates initially raised a number of technical and legal challenges • IT systems: Handling a situation where borrowers receive and investors pay interest. • Tax issues: Borrowers pay tax on interest received; investors can deduct any interest payable. ​Borrowers: Benefit from negative interest rates, e.g.
Monetary policy developments in advanced economies will continue to shape EM capital flows in important ways, particularly volatile portfolio flows. 26. The fact that the long-awaited beginning of the Fed’s interest rate hiking cycle did not spark excessive market volatility was encouraging, given the long road of policy normalization that lies ahead for the Fed.