Financial Stability News

News about financial stability, central banking and theory of money

Tag Archives: pension funds

The impact of persistent negative interest rates

This post gives a good review of the issues and consequences of pesistent Negative Interest Rate Policy (NIRP)

The NIRP acronym is misleading, however, because unlike ZIRP, NIRP isn’t actually an official “policy” per se, but rather a symptom of a broken financial system increasingly starved for good ‘collateral’.

This phenomena, thought by many to be of short duration, is now having its impact on investors, especially insurance companies and pension funds.

The impact is felt only gradually, but will get worse if NIRP continues. Together with the crisis in the real economy, this dosn’t look good.


Watch this amazing trader on BBC

This post on Naked Capitalism on Monday is just amazing – and quite scary. The guy is essentially saying that the politicians are powerless to fix the crisis, that the economy is run by Goldman Sachs and the pension funds and that we all should run and save our assets (in case we have any!). And remember, it is people like him that are supposed to take care of our pension funds. Is this efficient markets and optimal allocation? I guess not.