Report
Negative long-term interest rates: What are the real problems?
The fact that long-term interest rates can be negative has come as a shock to many observers. But what are the real problems with negative interest rates? It is no longer possible to carry out actuarial calculations or therefore to calculate the fundamental value of asset prices, which is a serious problem; Savings are attracted to money-market assets , since banknotes and sight deposits offer a return of 0%; Investors switch to risky assets, and risk premia are squeezed and no longer compensate the risk taken; There is no longer any market discipline, since even highly indebted borrowers are solvent.
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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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