“Like a tax”. This is how Stefan Beiner, head of asset management at Publica, Switzerland’s largest pension fund, described the recent European Central Bank’s (ECB) interest rate decision.
He believes that ultimately savers will be the ones having to pay via low interest.
Mr. Beiner also said that although the rate cut had been largely “expected by the markets”, it was exactly what European pension funds did not need. He claims a rate increase could “hurt pension funds over the short term with an accounting loss” and that, over the long term, higher interest rates would help the pension fund industry.
Please find out more here and read BETTER FINANCE's blog post on "Financial Repression: the lesser evil or institutionalised theft?" here.