Knot warns of drawbacks of negative rates
Consumers are increasing their savings rather than their consumption
The president of the Netherlands Bank, Klaas Knot, warned about the downsides of negative rates in the eurozone in a speech in Amsterdam in February 27.
Knot acknowledged negative rates had a positive influence on the eurozone economy during the period 2015–18. When the region was struggling with low growth and the danger of deflation, unconventional monetary policies were “beneficial for inflation, growth and the creation of jobs, and especially asset prices,” he said.
Nonetheless, their
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