The money tap continues to run, while savers continue to suffer

An update of Swiss Re's financial repression index reveals that the use of unconventional monetary policies remains near the record high. As a result, the "invisible tax" on savers has increased.

In 2014 alone, US households lost an additional USD 170 billion in foregone interest rate income as a result of unconventional central bank policies – called financial repression. Building on the figures released in our study, Financial repression: The unintended consequences, this amounts to a total loss of USD 670 billion since the 2008 financial crisis.

Likewise, we estimate that EU and US insurers lost an additional USD 100 billion in yield income in 2014, bringing the total to USD 500 billion since 2008.

Read our new factsheet for a summary of the costs.

Share your thoughts on the topic with us via our Open Minds blog, which highlights key takeaways from the Eurofi Financial Forum held on 9-11 September.

Our work on this topic intends to derive important implications for sustainable policymaking that will help build stable global capital markets.

We should not wait for tomorrow to see the effect of the policy actions taken to date. Instead, we should put in place the elements for more stable markets today.

Published 11 September 2015


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