It doesn't cost any more to store bits or paper in Europe now than it did when interest rates were positive. The "storage costs" metaphor as a justification for negative interest rates is a whopping falsehood.
-
Yes, okay for the big boys who do cross-currency basis swaps, but murderous for, say, pension funds with rules forcing them into these instruments. Negative rates exploit "rule inertia" - the fact that rule makers never imagined such rates would exist.
They also expose how heavily and disastrously regulated the fixed-income market is. It often departs very far from the ideal free market of economics classrooms, with prices often "signalling" more the consequences of regulations than natural supply and demand.
