Negative Interest Rates and Financial Stability: Lessons in Systemic Risk

This book explores the impact of negative interest rates policy (NIRP) on systemic risk, focusing on its effects and implications on the banking sector and financial markets. It assesses whether NIRP has a stronger impact on systemic risk than conventional monetary policy and adopts both theoretical and practical approaches to provide a guide for policymakers, academics, advanced students, and researchers.

Format: Hardback
Length: 272 pages
Publication date: 01 December 2022
Publisher: Taylor & Francis Ltd

This comprehensive book delves into the realm of negative interest rates policy (NIRP), a recently introduced monetary tool employed by central banks across various economies, including the Eurozone, Switzerland, and Japan. It offers a detailed exploration of this phenomenon, providing insights into its implementation and potential impact on systemic risk. While initially introduced as a temporary policy measure, the book suggests that NIRP may become a more prevalent tool in the future, utilized by a broader range of central banks than initially anticipated. Consequently, it examines the effects and implications of NIRP on the banking sector and financial markets, with a particular emphasis on the potential adverse consequences.

A significant focus of the book is placed on the uniqueness of negative policy rates in the context of financial stability concerns. The authors assess whether NIRP has a stronger or more significant impact on systemic risk compared to conventional monetary policy. The book is designed to present and evaluate the initial experiences of NIRP policy during normal, pre-COVID times, rather than in periods of rapid disruption or when the source of the disruption is not purely economic, as seen in systemic crises.

To address these key issues, the authors employ both theoretical and practical approaches. They explore the theoretical foundations of NIRP, examine its historical background, and analyze its economic and financial implications. Additionally, the book provides case studies and empirical evidence to support its arguments and shed light on the practical challenges and opportunities associated with NIRP implementation.

The intended audience for this book includes policymakers, academics, advanced students, and researchers in the fields of financial economics and international finance. It serves as a valuable resource for those seeking to understand the nuances of NIRP, its potential consequences, and the policy responses required to navigate this evolving monetary landscape. By providing a comprehensive and interdisciplinary approach, the book aims to contribute to the ongoing discourse on monetary policy and financial stability.

Weight: 660g
Dimension: 234 x 156 (mm)
ISBN-13: 9781032319490