According to The Economist via CFO, in June of last year the European Central Bank reduced its benchmark interest rate, at which it lends to commercial banks, to 0.15% and its deposit rate, which it pays to banks on their reserves, to -0.1%.
As you know, in practice this negative interest rate means the ECB has been charging banks for holding their excess deposits in order to encourage more lending, in theory...
From a consumer point of view, it is likely that banks will be tempted to follow Alternative Bank Schweiz plan to charge consumers to hold their deposits via negative interest rates from January 2016.
This is where consumer savviness comes in...
Apart from putting their money under a mattress, depositors might choose to safeguard their savings by making advance payments to the taxman and then claiming them back, or withdraw their money as bankers' drafts and liquidate them when required...
The article adds that any form of pre-paid card, such as urban-transport passes, gift vouchers, or mobile phone SIMs could also double up as zero-yielding assets.
If interest rates became deeply negative, it would turn business conventions upside down. Companies would seek to make payments quickly and receive them slowly. Their inventories would grow fatter.
In other words, like deflation, negative interest rates are not an easy concept to work into the NAM's day-job, but we can be sure that the savvy consumer will be way ahead of us...
In fact, since since some savvy consumers are also well-networked burglars, you might usefully chalk the 'nothing worth stealing' option outside your house to disguise the fact that you have personally taken the 'under-mattress' option...
