In today’s Macroeconomic Briefing the highlighted research is focussed on the increasing prospects of European interest rates going deeply negative, as policy makers seek to grapple with what some analysts characterise as a European crisis 2.0. With the ECB mandated to target inflation only, the key question is how negative can they drive interest rates. One analyst highlighted below that the ”zero lower bound” is no longer a concept. What has become quite clear though is the current monetary policy framework no longer works. The leading candidate to replace inflation targeting, Economic Perspectives argues below, is nominal GDP targeting. But that won’t happen anytime soon, and in the meantime, as rates move deeper into negative territory, banks are in mortal danger. This then has spillover effects. Liquidity will suffer, and this time it is the asset management industry that will be hit. A combination of low rates and the resulting chase for yield has meant they hold ever more illiquid assets, and while there have been only a few isolated cases to date, where investment firms have run into trouble, MI2 Partners put it quite bluntly. ”There is never just one cockroach.” Happy Monday.