Villeroy de Galhau, the Governor of France’s central bank, recently had an exclusive interview with CNBC. On the show, he explained that he was pleased with the way negative interest rates were working.
“We have shown since March that we can react and innovate in a very powerful manner,” he told CNBC. Galhau elaborated that providing liquidity for banks has prevented any of the possible negative outcomes. “On our side, we are pleased with the way negative rates work [and] I see no reason to change that level at present.”
The comments are one of the most direct approvals of negative interest rates from a central bank official. Whereas negative interest rates were years ago thought to be the last resort option, they seem now poised to become the ‘new normal.’
The U.S. Federal Reserve has been mulling over adopting negative interest rates as well. However, this does not seem likely in the ‘near term’ according to the Global Strategy for Wells Fargo. President Trump recently endorsed the idea in a tweet.