Negative interest rate policy by the Bank of Japan from the perspective of monetary policy in Europe

In response to the financial crisis, central banks around the globe responded with unconventional monetary policies, including negative interest rates (NIR). This chapter analyses NIR in Japan from the perspective of central banks in Europe, considering negative side effects of NIR including declining bank profitability, risks to financial stability, balance-sheet policies and global imbalances through currency depreciation. Another focus is on international implications such as the Brexit referendum and the 2016 US election, which suggest that enhanced coordination and cooperation between central banks is needed to maintain global financial stability and to prevent future crises.