If you happen to be the only one with negative interest rates, you also weaken your currency, which means you make your exports more competitive.
Mohamed El-ErianOnce you start moving [market] lower, then you trigger of all sorts of things. You trigger people who have to sell because they're over-levered. So they sell their winners and their losers. They're just trying to raise cash. So, what you then get is spreading malaise throughout the global markets.
Mohamed El-ErianThe once-unthinkable loss of the AAA rating will constitute a further hit to already fragile business and consumer confidence.
Mohamed El-ErianThe theory is that if you take interest rates negative, people are going to say, "That's a silly game! I'm not going to lend my money to governments who want me to pay them. I am going to go into the stock market where I can get positive returns!"
Mohamed El-Erian