I wonder about that. In theory it means you can have interest rates that are well below 0% (think of -2% or worse). The idea behind negative interest rates is that there is work to be done that cannot be financed at a 0% interest rate and that the interest rate has to be even lower.

If you assume 2% bank fees and a -3% interest rate it would be possible for banks to hand out -1% loans and that would allow financially insecure consumers to acquire loans because you cannot default by definition. Your principal will shrink even if you do nothing.

Will this work? I feel like it could work but it could also have unintended consequences.

>because you cannot default by definition. Your principal will shrink even if you do nothing.

That's not what default means. If you stop making monthly payments, you're in default. From wikipedia:

> Default may refer to: Default (finance), failure to satisfy the terms of a loan obligation or failure to pay back a loan

No they where talking about taking the -ve interest from the bank accounts