The Bank of England has moved closer to adopting a negative interest rate policy. The central bank has asked commercial banks in the U.K. to provide details of how ready they are to deal with negative interest rates, asserting that for the policy to be effective, commercial banks need to be ready to implement it.
Bank of England Engages Commercial Banks on Negative Interest Rates
The Bank of England has asked commercial banks how ready they are to implement negative interest rates. This followed the central bank’s Monetary Policy Committee (MPC) revealing that it would assess the appropriateness of a negative official bank rate, including how a negative interest rate policy could be effectively implemented.
The central bank sent a letter, dated Monday, to the CEOs of commercial banks requesting information about their “Operational readiness for a zero or negative bank rate.” The letter is accompanied by a survey, which the