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Financial repression: what does it mean for savers and investors?

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Listed:
  • Fulcher, Paul
  • Boardman, Richard
  • Collier, Ian
  • Gasser, Hans-Christof
  • Price, Rod
  • Shelley, Paul
  • Softley, Sarah

Abstract

At the end of 2013 the real yields that the UK government had to pay on its debt were negative over the whole curve. Several possible explanations are available for this phenomenon – central bank action, regulatory changes, demographic developments and economic conditions. The first two can result from deliberate interaction by the state into the financial markets and can be labelled as financial repression. We explain the historic precedents for Governments to use financial repression to manage their debt, look into the influence of regulation on asset allocation for insurers and pension funds, and introduce the concept of a balance-sheet recession.

Suggested Citation

  • Fulcher, Paul & Boardman, Richard & Collier, Ian & Gasser, Hans-Christof & Price, Rod & Shelley, Paul & Softley, Sarah, 2014. "Financial repression: what does it mean for savers and investors?," British Actuarial Journal, Cambridge University Press, vol. 19(3), pages 757-771, September.
    • Handle: RePEc:cup:bracjl:v:19:y:2014:i:03:p:757-771_00
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    References listed on IDEAS

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    1. Carmen M. Reinhart & Vincent R. Reinhart & Kenneth S. Rogoff, 2012. "Public Debt Overhangs: Advanced-Economy Episodes since 1800," Journal of Economic Perspectives, American Economic Association, vol. 26(3), pages 69-86, Summer.
    2. Carmen M. Reinhart & Kenneth S. Rogoff, 2015. "Financial and Sovereign Debt Crises: Some Lessons Learned and Those Forgotten," Journal of Banking and Financial Economics, University of Warsaw, Faculty of Management, vol. 2(4), pages 5-17, June.
    3. Reinhart, C. M., 2012. "The return of financial repression," Financial Stability Review, Banque de France, issue 16, pages 37-48, April.
    4. Carmen M. Reinhart & M. Belen Sbrancia1, 2015. "The liquidation of government debt," Economic Policy, CEPR, CESifo, Sciences Po;CES;MSH, vol. 30(82), pages 291-333.
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