Cursed Interest Rates

Reviewed by Diario de un Inversor · UpdatedJune 13, 2026

Our review

Published in 2020, this collective work addresses one of the most disconcerting economic phenomena of the past decade: the policy of interest rates at historic lows — and even negative levels — sustained by the ECB and other major central banks following the 2008 financial crisis. The various authors analyse the consequences of this policy from complementary perspectives: penalised household savings, the search for yield in higher-risk assets, the impact on pension funds, distortions in real estate asset valuation, and the zombification of companies surviving artificially on cheap credit. The book's value is that it names the silent losers of expansionary monetary policy, a narrative that central bank communicators rarely frame with this clarity. Its limitation is that it was written just before the rate-hiking cycle that began in 2022, which means some conclusions should be read with historical perspective. A useful document for understanding the lost decade of the European saver.

Key takeaways

• Negative or ultra-low interest rates transfer income from savers to debtors, with significant distributional consequences.
• The search for yield in a low-rate environment pushes conservative investors toward assets with a risk profile they do not fully understand.
• Pension funds and life insurance products are particularly vulnerable to prolonged low-rate environments.
• Extended expansionary monetary policy can create zombie companies that survive on cheap credit rather than improving their productivity.

Fact

In 2019, the year before the book was published, the ECB held its deposit rate at -0.40%, an unprecedented level in the history of the European central bank.