Low Interest Rates and Financial Stability

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  1. george lomost commented on Mar 30

    “Failures at life insurance and pension funds are unlikely to provoke a systemic financial crisis.”

    This only crushes the little people and we obviously don’t count. At least the ECB is honest about who they serve.

  2. RW commented on Mar 30

    Interestingly enough the reasons for low interest rates is the topic of Ben Bernanke’s first blog post (ht PK)

    Why are interest rates so low?

    Why are interest rates so low? Will they remain low? What are the implications for the economy of low interest rates?

    If you asked the person in the street, “Why are interest rates so low?”, he or she would likely answer that the Fed is keeping them low. That’s true only in a very narrow sense. …The Fed’s ability to affect real rates of return, especially longer-term real rates, is transitory and limited. Except in the short run, real interest rates are determined by a wide range of economic factors, including prospects for economic growth—not by the Fed.

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