Wednesday, June 17, 2015

Swiss Re Meeting 
on Financial Repression -
The Unintended Consquences
Swiss Re jointly with the Institute of International Finance (IIF) & The Geneva Association have agreed to share the key themes of the discussion:
"Financial repression not only results in a 'tax' on households today since it prevents them from earning interest on their deposits; it also means future generations will have to shoulder the long-term costs – including the underfunding of pension provisions. At present, the need to increase savings to compensate for low interest rates has weakened consumption growth, resulting in poor economic recovery and adding to the excess of cash in search of yield. Furthermore, the distortions created in capital markets – in particular a possible mispricing of risks – must be considered. Participants also noted that the unprecedented active participation of public institutions in financial markets risks crowding out private investors and thus reducing the diversification of funding sources – whereby a key element of financial stability is at risk of being weakened."
LINK HERE to the statement

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