Fed asks banks to test for negative rates
he Fed's adding a new twist to its severely adverse scenario in this year's stress test - asking lenders how they would handle a prolonged period of rates below zero. Ninety-day bill rates slipped below 0% a number of times over the past few years, but never stayed there for very long.
Along with that scenario would be unemployment doubling to 10% - the same level it hit after the financial crisis.
Negative rates, of course, are breaking out all over Europe, and the Bank of Japan last week introduced negative deposit rates as part of its latest attempt to spur the economy into faster growth.
The Fed and Fed watchers caution negative rates are just a stress test scenario, and not necessarily any sort of forecast about where things are headed.
http://seekingalpha.com/news/3074516-fed-asks-banks-test-negative-rates