4 September 2014
The latest issue of the British Actuarial Journal (BAJ) is now available
Members can access all articles free of charge - visit Member access to BAJ and AAS.
In this issue, the Financial Repression Working Party considers financial repression - what does it means for savers and investors?
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.
The Financial Repression Working Party 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.