Report
Need for a shift from debt financing to equity financing of the economy
Since the 1980s, OECD economies have been financed by debt and not by equity. This can be explained by the fall in real interest rates, the desire to use debt leverage to increase the return on equity, and the high cost of equity financing. Today, however, debt ratios are very high, financial fragility is significant, and the long-term outlook is for real interest rates to rise rather than fall. It will therefore be necessary to gradually move from debt financing to equity financing, which at equilibrium will require a change in the structure of savings.
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Natixis
Based across the world’s leading financial centers, Natixis CIB Research offers an integrated view of the markets. The team provides support to inform Natixis clients’ investment and hedging decisions across all asset classes.
Patrick Artus
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