The declining economic outlook and increasing political pressure are pushing central banks into more aggressive unconventional monetary policies. Simultaneously, fears are growing that such steps, especially negative interest rates, actually threaten the stability of the financial system. They risk setting off dangerous feedback loops in credit markets and the real economy, where the second and third-order effects are difficult to ...

Donald Trump’s persistent attacks on the Federal Reserve raise an important question: What should and shouldn’t presidents say about the central bank? The key is to understand the difference between the concepts of independence and accountability. It’s crucial that the Fed enjoy independence from elected officials in deciding how to pursue the goals that Congress set out for it — ...

Mario Draghi’s public scolding of Europe’s lenders this week matters more than what he did for them. Banks in the region have long complained of the squeeze negative interest rates are putting on their profits — upending their traditional business model of borrowing money for the short term to lend to clients in the long run. But there’s little they ...