How Central Banks Use Negative Interest Rates

Monetary Policy Explained with Fexingo: Central Banks, Money Supply, and Interest Rates · Jun 7, 2026 · 7m · transcript

Episode 36 of Monetary Policy Explained dives into negative interest rates – a policy that flips conventional banking on its head. Lucas and Luna examine the European Central Bank's experience with negative rates from 2014 to 2022, including the impact on bank profits, lending, and savings. They break down why central banks turn rates negative, how the policy transmits to the real economy, and the limits that led the ECB to end its experiment. With specific data on the ECB's -0.5% deposit rate and its effect on bank net interest margins, the episode gives listeners a concrete…