Negative Interest Rates Again

A few months ago I commented that zero wasn't really the lower bound on interest rates, it was probably slightly below that. Well, the Swedish Riksbank today cut its deposit rate to negative 0.25%, meaning that banks will have to pay to hold excess reserves. Did the kroner collapse? Is there a run on the banking system? No and no. Why? Because holding large quantities of cash is, quite simply, a tremendous bitch.