Low and Negative Interest Rates Policy in Commercial Banks

Abstract

One of the objectives of the research was to study how monetary policy of low and negative interest rates has affected the main component of commercial banks. Furthermore, to study the possible reaction of customers to such services from commercial banks. The data for this thesis were collected from literary sources, such as books, articles and sources from previous researches. Moreover, the information was also gathered from the Internet and interviewing of two case groups, two commercial banks and 15 respondents, namely customers. The results of the study show that the issue of low and negative rates for customers is certainly unexpected. Based on the results obtained, it was concluded that, on the one hand, depositors would be ready to take measures to prevent capital loss immediately. On the other hand, people are not quite sure how to behave in such an environment. That leads to the understanding that banks can create an additional product that will allow them to continue to hold capital, thereby increasing their net interest margin.