QE & Ultra-low Interest Rates: Distributional Effects + Risks

November 14, 2013 10:30am by Barry Ritholtz

McKinsey has a new study out on the impacts of QE. I have yet to read the full report (or summary) but the graphic above and excerpt below give you some flavor:

The impact that ultra-low interest rates have had on banks has been mixed. They have eroded the profitability of eurozone banks, resulting in a cumulative loss of net interest income of $230 billion between 2007 and 2012. But banks in the United States experienced an increase in effective net interest margins and a cumulative increase in net interest income of $150 billion. The experience of UK banks falls between these two extremes.

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