EconPapers    
Economics at your fingertips  
 

The Economic Impact of Protracted Low Interest Rates on Pension Funds and Insurance Companies

Pablo Antolin (), Sebastian Schich and Juan Yermo

OECD Journal: Financial Market Trends, 2011, vol. 2011, issue 1, 237-256

Abstract: A period of protracted low interest rates is a feasible, even if not the most likely, scenario going forward and such a scenario would adversely affect pension funds and insurance companies. Protracted low interest rates affect investment opportunities and have a potentially significant adverse effect on life insurance companies and institutions whose liabilities consist of a fixed investment return or benefit promises, such as is the case for defined-benefit pension funds. It cannot be ruled out that the financial institutions affected engage in “gambling for redemption” in an attempt to match the level of return promised to beneficiaries when financial markets were more elevated.

Date: 2011
References: Add references at CitEc
Citations: View citations in EconPapers (22) Track citations by RSS feed

Downloads: (external link)
https://doi.org/10.1787/fmt-2011-5kg55qw0m56l (text/html)
Full text available to READ online. PDF download available to OECD iLibrary subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:oec:dafkad:5kg55qw0m56l

Access Statistics for this article

More articles in OECD Journal: Financial Market Trends from OECD Publishing Contact information at EDIRC.
Bibliographic data for series maintained by ().

 
Page updated 2020-06-16
Handle: RePEc:oec:dafkad:5kg55qw0m56l