1 Over the longer term, however, abnormally low or negative interest rates, together with a very flat yield curve and negative term premia, can have adverse effects.2 Those banks whose business depends heavily on maturity transformation and on deposit-based 2/5  BIS central bankers' speeches  refinancing are being hit particularly hard.
And as it is difficult to pass negative interest rates onto retail customers and as the introduction of fees provides only limited remedy, some of the banks will have to adapt their business models. Also, consolidation will continue to be necessary to increase long-term efficiency. We are already seeing now that concerns about the future profitability of banks are affecting their share prices.