[_bxg1]

So in a hyperinflation scenario, money could be losing value faster than the negative interest rate, so you're basically paying someone else to take on that risk/loss.

That makes sense, although another commenter said inflation in Denmark is very low right now, so it doesn't seem to apply here.

[SilasX]

>So in a hyperinflation scenario, money could be losing value faster than the negative interest rate, so you're basically paying someone else to take on that risk/loss.

No, that still wouldn't favor this kind of lending, because the contract is specified in nominal terms, so you end up with less, even in that sense; it would always make more sense to buy something that holds its real value.

Now, if you were paying someone $1 to give you a can of tuna in a year, when tuna cans currently sell for $0.99, that might make sense in hyperinflation, because you'll get one tuna can worth of real value then, which you could legitimately value more than the dollar today.

But that's not what's happening here. They're paying $1 for $0.99 a year later. [1] There are very few scenarios where that makes sense, and especially not hyperinflation, where the $0.99 will only buy a hundredth of a can of tuna in a year.

[1] Not that specific ratio, just using those figures to keep the example simple.