By David Scott | Monday 10 April 2017
A prolonged period of low interest rates will tempt banks to take greater risks and sound the death knell for final salary pensions, the International Monetary Fund has warned. A new study from the IMF said a continuation of the cheap borrowing environment seen since the global financial crisis a decade ago would pose a “significant challenge” to financial institutions and force them to make fundamental changes to their business models. Although interest rates have recently started to rise in the US, the IMF said Japan’s experience suggested an imminent and permanent end to the current low interest rate environment could not be guaranteed.
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