Negative interest-rates...

Negative interest rates these days in Europe and then in Japan is the latest unconventional tool of the monetary-policy to increase demand and growth with a persistent deflationary bias in the general price-level attributed to low demand and spending, consumption or investment. Deflation is a prime cause of low interest-rate and the central-banks are trying to reduce real interest rate in order to adjust to natural interest-rate which would keep unemployment and inflation at the targeted or NAIRU-level while increasing the growth-rate to catch the potential. In their efforts to converge interest-rate to the natural rate the central-bank has adopted the negative interest path when inflation has failed to materialize to cut-down the real-rates. The banks as negative rates sound are charging its savers and customers for their deposits in order to dis-incentivize savings and incentivize consumption and investment. The negative interest-rate used by the central banks has charged on deposits but we have not heard banks paying for loans.  Negative interest also means reversal of incentives to invest or spend from the creditor to the debtor. It also means that the banks might have to pay more for spending or investment. Only then it is consistent with the outcome we want, more consumption more investment (or spending)... Is it happening...?