Central banks must use “unconstrained” negative rates, Rogoff tells ECB

Policy-makers need to carry out major reforms to how banks hold money, or future attempts to use negative interest rates are likely to fail, Kenneth Rogoff warned the European Central Bank.

Rogoff and his co-author Andrew Lilley make the claim in their paper, The case for implementing effective negative interest rate policy, which they presented on October 7 to the ECB’s conference on monetary policy.

The use of negative rates was seen as a key tool to reflate economies at the onset of the