The Bank of Japan (BoJ) made history overnight when the policy board of the bank decided to introduce "Quantitative Monetary Easing with a Negative Interest Rate." This decision means that the BoJ will now apply a negative interest rate of minus 0.1% to the marginally increased part of current accounts that financial institutions hold at the bank.
BoJ: A three-tier system
In the implementation of this system, the bank will adopt a three-tier system. The outstanding balance of each financial institution's current account at the bank will be divided into three tiers, each of which will receive a different interest rate.
1) Basic balance -- corresponds to the existing balance of each financial institution's current account at the bank calculated as the average outstanding...
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