These include not only the burden on savers, banks and insurance companies but also the risk of reducing the pressure to reform on policymakers as well as the risk of creating asset price bubbles. Such measures should only be taken as and when it is really necessary and the cost-benefit analysis is still positive.
To sum up, despite these risks and side effects I still consider negative rates to be justified at the moment. But going beyond that I’m sceptical about further interest rate reductions. 1  ECB Economic Bulletin, issue 4/2016, Box 3. 2  Monetary aggregate M1, which also includes currency, grew more slowly in June 2016 (8.6%) than in the preceding month (9.1%).