from Zero Hedge
Back in the summer of 2014, when the ECB first unveiled NIRP, many were concerned that this submersion into the monetary policy twilight zone would first crush Europe’s money markets. However, at least until now, European MM funds have proven relatively resilient,
The story in Japan is different.
When the Bank of Japan announced they were instituting NIRP back in January, they intended to spur lending and push inflation up. As often is the case with central planners, their academic theory was much different than the economic reality.
Money market has fallen off a cliff in Japan, and the freeze in short-term credit markets can be solely attributed to the BOJ’s negative interest rate policy.