Slide 22: Incentive to switch to cash depends on level and expected duration of negative rates An investor considering whether or not to circumvent negative interest rates by hoarding cash is interested in the differential between the shortterm interest rate and the zero rate that can be earned by holding cash.
But it is also important for how long this differential is expected to persist. This is illustrated in the chart where the shaded areas provide a measure of the incentive to switch to cash. It is worth pointing out that based on this measure the incentive is significantly lower than in mid-February 2015 or a year ago.