Boom-to-Bust Replay Haunts Denmark Tackling Negative Rate Risks
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Denmark’s policy makers are struggling to ensure negative interest rates don’t distort a housing market that crashed just six years ago.
Central bank Governor Lars Rohde says the $300 billion economy may be at risk as “very low rates for a long time will advance the property market quite a lot.” Any sudden shift in the direction rates take would “risk leaving households under water and the lesson from the most recent crisis is that this will cut consumption considerably,” he said yesterday in an interview, after speaking at a mortgage bankers’ conference in Copenhagen.