Without financial repression, euro-zone long-term interest rates would be markedly higher

How can long-term interest rates be zero or negative in the euro zone without all savings flowing into bank deposits, which pay a zero interest rate and are risk-free, while there is still a risk involved in holding bonds? One possible explanation is financial repression, rules that force investors to hold public debt. This can involve: For foreign central banks, rules that limit their investments to risk-free bonds; For euro-zone banks, forced holding of risk-free bonds because of liquidity ratios; For institutional investors, forced holding of risk-free bonds because of Solvency II rules that discourage the holding of risky assets .