Risiken der Niedrigzinspolitik für die Finanzstabilität im Euroraum

By means of unconventional measures such as negative policy rates and bond purchases, monetary policy has made a significant contribution to contain financial and public sector debt crisis in the euro zone. However, a long lasting policy of ultra-low interest rates generates substantial risks for financial stability. Thus, profitability of banks and life insurer is under pressure, leading to excessive risk-taking or reduced resilience. At the same time, there is a growing likelihood of asset price and debt bubbles when monetary policy reacts in an asymmetric way to financial booms and busts, promoting speculative behavior in markets. Low interest rates can ultimately become self-reinforcing, impairing the central bank"s ability to fight inflation