"Well below 1%" sounds like something insane such as 5%. Imagine only having 100k in the bank and losing 5k per year, wtf? Even if it was "only" 3%, people would simply stop storing any kind of value in banks and convert all their wealth to stocks, real estate, gold, and Bitcoin. The problem there is, you can't legislate the stock and real estate bubble into lasting forever with NIRP. Eventually it will blow up anyway. Things have to swing back towards the hard currencies instead (Bitcoin and gold).
This is even more ridiculous when you consider the high inflation rates that countries like India have. Here, the central government manages to achieve reducing your purchasing power, even while maintaining rates at 5+%. They just let inflation do its job. Real interest rates are way negative.
The issue is money velocity. It has been hurtling to lower and lower extremes while base money has been printed into the stratosphere in an attempt to prevent a deflationary credit collapse.
If interest rates ever become strongly negative then consider the bank pays you to continue your mortgage or loan if you are fixed to the central bank rates. Consider this will also drive money into bonds IMO which will pay nothing but continue to be a 'safe haven'. Bitcoin and other cryptocurrencies with exponentially falling inflationary schedules should benefit hugely also.
Over the longer term this is looking like it will become the greatest slow motion financial train wreck in history. Everyone still dies at the end. (The baby boomer generation has a lot to answer for.)
