In June 2014, the ECB was the first major central bank to lower one of its key interest rates into negative territory.[1] As experience with negative interest rates was scant, the ECB proceeded cautiously over time, lowering the deposit facility rate (DFR) in small increments of 10 basis points, until it reached -0.5% in September 2019. While negative interest rates have, over time, become a standard instrument in the ECB’s toolkit, they remain controversial, both in central banking circles and academia.[2] In my remarks today, I will review the ECB’s experience with its negative interest rate policy (NIRP). I will ... (full story)