Ever since the Bank of Japan went to negative rates, it has been hard to keep up with all of the negative interest rate news. I only learned yesterday that on March 22, 2016, the National Bank of Hungary has a -.05% rate for deposits with the central bank. That and other rumblings I have heard from Eastern Europe making me think that Eastern Europe is a priority for my travels to talk to central banks about negative interest rate policy. I hope to put together a European tour in Fall 2016, as well as an East Asian tour.
I also learned yesterday about former Federal Reserve Board Governor Randy Kroszner’s comments about negative interest rate policy. Kalyeena Markortoff reports in a March 21, 2016 article on cnbc.com:
Kroszner said that it would take a “significant negative shock that led to a threat of significant deflation” for the Fed to consider negative rates — a policy tool which has already been deployed by the likes of Japan, Switzerland, and the European Central Bank (ECB).
“I don’t see that as a likely outcome, but I never say never after what I experienced in 2006 to 2009,” Kroszner said.
“I don’t think any of us sitting around the table back at the end of 2008 thought that we’d be in 2015, 2016 (and) that we’d be debating the first (interest rate) increase and then whether we could move beyond that,” he added.