Would Bernanke's Negative Interest Rate Policy Lead to Larger Unbanked Population?

In a blog post earlier this week, former Fed Chair Ben Bernanke argued for a policy of negative nominal interest rates as being preferable to a higher inflation target for boosting the economy in a severe slump. While his concerns about the downsides of a higher inflation target seem somewhat overblown, there is an important negative aspect to his proposal for negative rates that his post overlooks.

If banks have to pay money on the reserves they hold, then they have less incentive to acquire...