{
  "title": "Negative Interest Rates: How Big a Challenge for Large Danish and Swedish Banks?",
  "publication": "IMF Working Papers, October 14, 2016",
  "sourceUrl": "https://www.imf.org/en/publications/wp/issues/2016/12/31/negative-interest-rates-how-big-a-challenge-for-large-danish-and-swedish-banks-44332",
  "canonical": "https://www.imf.org/en/publications/wp/issues/2016/12/31/negative-interest-rates-how-big-a-challenge-for-large-danish-and-swedish-banks-44332",
  "overlayPath": "/en/publications/wp/issues/2016/12/31/negative-interest-rates-how-big-a-challenge-for-large-danish-and-swedish-banks-44332/index.md",
  "summary": "Negative policy interest rates have prevailed for some years in Denmark and are a more recent development in Sweden. Among other potential side effects, negative rates could weaken banks’ profitability by reducing net interest income, their main source of earnings.",
  "sections": [
    {
      "heading": "Summary and key findings",
      "content": "- Negative policy interest rates have prevailed for some years in Denmark and are a more recent development in Sweden.\n- Negative rates could weaken banks’ profitability by reducing net interest income, their main source of earnings.\n- An analysis of financial statements at the country rather than the consolidated group level shows that bank margins have been broadly stable.\n- At least to date, lower interest income was offset by:\n  - reductions in wholesale funding costs, and\n  - higher fee income.\n- The impacts on bank health and lending from negative interest rates will need to continue to be monitored closely."
    },
    {
      "heading": "Analysis focus and approach",
      "content": "- Level of analysis: financial statements analyzed at the country level rather than consolidated group level.\n- Main metrics of concern: net interest income, bank margins, wholesale funding costs, fee income, bank health, and lending."
    },
    {
      "heading": "Subject areas and keywords",
      "content": "- Subject: Bank soundness; Banking; Central bank policy rate; Deposit rates; Financial sector policy and analysis; Financial services; Monetary policy; National accounts; Negative interest rates; Personal income.\n- Keywords: bank; bank activity; bank conglomerate; bank earnings component; bank equities; bank equity price; bank leverage ratio; bank operating income; Bank Profitability; Bank soundness; Central bank policy rate; commercial bank; Denmark; Deposit rates; earnings structure; Europe; financing; interest income; interest rate; leverage ratio; mortgage bank subsidiary; Negative interest rates; operating income; Personal income; rate; Sweden; WP.\n\n---\n\n Content in this bundle\n\n- Negative Interest Rates: How Big a Challenge for Large Danish and Swedish Banks?\n  - Negative Interest Rates: How Big a Challenge for Large Danish and Swedish Banks? (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - Negative Interest Rates: How Big a Challenge for Large Danish and Swedish Banks? (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/wp/issues/2016/12/31/negative-interest-rates-how-big-a-challenge-for-large-danish-and-swedish-banks-44332"
    }
  ],
  "bullets": [
    "[Markdown version](/en/publications/wp/issues/2016/12/31/negative-interest-rates-how-big-a-challenge-for-large-danish-and-swedish-banks-44332/index.md)",
    "[Structured JSON version](/en/publications/wp/issues/2016/12/31/negative-interest-rates-how-big-a-challenge-for-large-danish-and-swedish-banks-44332/index.json)",
    "[Bundle manifest](/en/publications/wp/issues/2016/12/31/negative-interest-rates-how-big-a-challenge-for-large-danish-and-swedish-banks-44332/bundle-manifest.json)",
    "Authors: Rima A Turk",
    "Published: October 14, 2016",
    "Series: IMF Working Papers",
    "DOI: https://doi.org/10.5089/9781475544688.001",
    "Negative policy interest rates have prevailed for some years in Denmark and are a more recent development in Sweden.",
    "Negative rates could weaken banks’ profitability by reducing net interest income, their main source of earnings.",
    "An analysis of financial statements at the country rather than the consolidated group level shows that bank margins have been broadly stable.",
    "At least to date, lower interest income was offset by:",
    "The impacts on bank health and lending from negative interest rates will need to continue to be monitored closely.",
    "Level of analysis: financial statements analyzed at the country level rather than consolidated group level.",
    "Main metrics of concern: net interest income, bank margins, wholesale funding costs, fee income, bank health, and lending.",
    "Subject: Bank soundness; Banking; Central bank policy rate; Deposit rates; Financial sector policy and analysis; Financial services; Monetary policy; National accounts; Negative interest rates; Personal income.",
    "Keywords: bank; bank activity; bank conglomerate; bank earnings component; bank equities; bank equity price; bank leverage ratio; bank operating income; Bank Profitability; Bank soundness; Central bank policy rate; commercial bank; Denmark; Deposit rates; earnings structure; Europe; financing; interest income; interest rate; leverage ratio; mortgage bank subsidiary; Negative interest rates; operating income; Personal income; rate; Sweden; WP.",
    "**Negative Interest Rates: How Big a Challenge for Large Danish and Swedish Banks?**"
  ],
  "related": [
    {
      "title": "Negative Interest Rates: How Big a Challenge for Large Danish and Swedish Banks?",
      "role": "document",
      "sourceUrl": "https://www.imf.org/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/wp/2016/_wp16198.pdf",
      "summary": {
        "path": "/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/wp/2016/_wp16198.pdf.md",
        "mime": "text/markdown"
      },
      "binary": {
        "path": "/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/wp/2016/_wp16198.pdf",
        "mime": "application/pdf"
      }
    }
  ],
  "alternates": {
    "markdown": "/en/publications/wp/issues/2016/12/31/negative-interest-rates-how-big-a-challenge-for-large-danish-and-swedish-banks-44332/index.md",
    "json": "/en/publications/wp/issues/2016/12/31/negative-interest-rates-how-big-a-challenge-for-large-danish-and-swedish-banks-44332/index.json",
    "bundleManifest": "/en/publications/wp/issues/2016/12/31/negative-interest-rates-how-big-a-challenge-for-large-danish-and-swedish-banks-44332/bundle-manifest.json"
  },
  "generatedAtUtc": "2026-09-17T18:30:42.488Z"
}