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The central banks can't force anyone to deposit money in negative-interest-bearing accounts, except for relatively small reserve balances that banks can't/won't

The central banks can't force anyone to deposit money in negative-interest-bearing accounts, except for relatively small reserve balances that banks can't/won't hold in cash or other short term liquid assets. Without the central banks, those daily reserve deposits would have to be held in cash, which would have a higher cost/risk than the central bank, as evidenced by banks keeping their deposits in negative-interest-rate accounts. They wouldn't do it if they had a better option. If banks were not even required to hold a fraction of their liabilities in reserve then bank runs would probably be far more common, but interest rates might be slightly higher between the busts.

yasp 7y ago
That entities are choosing to accept negative rates is certainly true (at least until paper currency is phased out, then it perhaps would be more debatable), but as far as I can tell, this is a nonsequitur. European banks are offering negative rates to savers because they are mandated to maintain reserves with the ECB, and the ECB is offering negative rates on reserves. The rate on reserves in turn drives the rate of inter-bank lending. So, it seems reasonable to me to ask what the market rate would be were the central bank not offering any interest on reserves, nor trying to set the rate of inter-bank lending, nor any similar rate. Would the market rate be negative, or zero, or slightly positive, or substantially positive? Have any economists taken a stab at the question? If not, why not?