Sounding the alarm on financial repression

Experts voice concerns about the ongoing use of unconventional policies

Financial market distortions as a result of financial repression pose a serious risk to financial stability. In this video, senior private and public sector representatives share further concerns about the implications of official sector policies that are keeping interest rates at historically low levels, including the invisible tax on savers.

These unconventional policies have pushed institutional investors into holding government debt. As a result they have less money available for productive investment, such as infrastructure projects. "It means that there's a global search for yield. That possibly leads to a misallocation of resources," said Douglas Flint, Group Chairman of HSBC, speaking at Swiss Re's Long-Term Investors' Dialogue on 16 June 2015.

"It is absolutely clear the short-termism is generalised, but we need long-term perspectives," explained Jean-Claude Trichet, Chairman of the Group of Thirty.

Read more about the outcome of the discussion in the Open Letter.

Published 3 July 2015


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