Of course, promoting lending, including to risky borrowers, is one of the goals of accommodative monetary policy. But the main question, however, is whether negative rates can also lead to excessive risktaking by banks. If accommodative monetary policy works as intended, then more investment projects will gain a positive net present value and will be financed – including some riskier ones.
That’s the “good” risk-taking. However, banks may be tempted to finance risky but negative net present value loans – that is excessive or “bad” risk-taking.