The dangers of negative interest rates

Negative interest rates could spark the next financial crisis. And central bankers could end up the object of the public's wrath, says Merryn Somerset Webb.

Who do you blame for the last great financial crisis? Just off the top of your head. I bet the phrase that pops up first is "the banks". If it isn't that, it will be something to do with whoever invented subprime mortgages or started "slicing and dicing" risk.

Unless you are a finance professional, it will not be the regulatory or rate-setting failures of central bankers. In the past decade, they have mostly been portrayed as the saviours of the global economy. Forced by the widespread political failure to provide fiscal stimulus, central bankers went into overdrive and tried to do everything themselves, showering the global economy with easy money and saving the world, and, in European Central Bank president Mario Draghi's case, the euro.

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Merryn Somerset Webb

Merryn Somerset Webb started her career in Tokyo at public broadcaster NHK before becoming a Japanese equity broker at what was then Warburgs. She went on to work at SBC and UBS without moving from her desk in Kamiyacho (it was the age of mergers).

After five years in Japan she returned to work in the UK at Paribas. This soon became BNP Paribas. Again, no desk move was required. On leaving the City, Merryn helped The Week magazine with its City pages before becoming the launch editor of MoneyWeek in 2000 and taking on columns first in the Sunday Times and then in 2009 in the Financial Times

Twenty years on, MoneyWeek is the best-selling financial magazine in the UK. Merryn was its Editor in Chief until 2022. She is now a senior columnist at Bloomberg and host of the Merryn Talks Money podcast -  but still writes for Moneyweek monthly. 

Merryn is also is a non executive director of two investment trusts – BlackRock Throgmorton, and the Murray Income Investment Trust.