Between 2015 and 2019, Sweden's central bank — the Riksbank, the world's oldest — set its key interest rate below zero. The bank was effectively paying commercial banks to borrow money from it, and charging banks to deposit money with it. The basic logic of saving and borrowing was inverted.

The Riksbank pushed its repo rate to negative 0.5 percent in 2016. The European Central Bank, the Swiss National Bank, Denmark, and Japan all moved into negative territory around the same time.

The reasoning was inflation. Prices in the eurozone and northern Europe were not rising at the target rate of 2 percent per year. Persistent low inflation threatened to slip into deflation, where falling prices encourage households and firms to delay spending, freezing the economy. Negative interest rates were a tool to force the issue: discourage saving, push banks to lend, juice consumer and business demand.

Some commercial banks passed the cost down to customers. Wealthy depositors at UBS in Switzerland paid roughly 0.6 percent annually to hold large balances. Some Swedish savers received the same treatment for accounts above a threshold. In a handful of extreme cases, mortgages actually paid the borrower a tiny amount each month rather than charging them.

Standard economic theory predicted catastrophe at the lower bound. Bank runs as customers withdrew cash. Hoarding of physical currency under mattresses and in safe deposit boxes. None of that happened — in part because rates never fell far enough below zero to make the cost of storing and insuring physical cash cheaper than the negative deposit charge.

Sweden exited its negative-rate experiment in late 2019, just before the pandemic. The legacy is still debated. Inflation finally returned in 2022 — for reasons no central banker had planned for.