Years ago negative interest rates were unheard of. Modeling assumptions (often purposely) excluded them due to their extremely low probability, it simply seemed counter intuitive that they could even be present in a market, and certainly if they did they seemed as if they’d be a rare blip and not a prolonged market environment.
Fast forward to today, and negative rates are rampant across the Euro Zone and continue to be a critically important issue in global finance. While the Bank of England has announced its plans to proceed with their strategy to raise rates, many countries still teeter near or below the zero mark. And this prolonged negative environment is impacting some of the most basic calculations and procedures used by derivatives practitioners.
Just how common are negative rates in our current markets? And as a derivative market participant, how could negative interest rates be impacting your business?
We’ve crafted The Uncharted Waters of Negative Rates map to help visualize these rates across the globe. Explore this helpful snapshot of the markets and access the linked resources to learn more about how the latest negative rates research and insights from Numerix experts can help you navigate the impacts of negative rates on your business.