Implications of Negative Interest Rates on the Financial Systems

Currently, the state of the banking sector in many countries is in opposition with respect to the banking systems of developed countries. The principal difference is that the one-way desire to stimulate economic growth in Asian countries is associated with high rates of inflation and interest rates on loans, while in the developed countries, on the contrary, with deflationary processes in the economy close to zero values of the interest on loans. A series of economic and financial crises of the last few decades, and the slowdown of the world economy forced the monetary authorities of many countries to introduce new tools to stimulate economic growth. Among the latest innovations of individual central banks focus attracting the program of «quantitative easing» (QE) and negative interest rates. The last have been used recently, whereby the long-term effects of these instruments on the economy is not yet known. We emphasize that the tools used by central banks, monetary authorities in the banking sector are aimed not solely at banks as the regulatory environment, and to all economic entities that interact with the banks acting guides monetary policy. In this connection, the phenomenon of negative interest rates rapidly beyond the banking sector.