OECD warns about risks of low interest rates

DAILY SABAH
ISTANBUL
Published 25.06.2015 23:06

A report released by the Organisation for Economic Co-operation and Development (OECD) warned that the current low interest rate environment poses a great risk for pension funds and insurance companies in terms of financial validity in the long-run. The report, which concerned the financial and business spheres, said pension funds and life insurance companies need to yield returns at higher rates, a reality that pushes such companies to high-risk investment funds. The report also suggested the high-risks that are taken by such companies accompany a risk of bankruptcy, and underscored that pension funds, which were $28.4 trillion in 2014, will surge to $35.8 trillion with an increase of 26 percent by 2019. The report said insurance companies assets are estimated to reach $37 trillion from $28.2 trillion with an upsurge of 33 percent in the same period, while investment funds are estimated to rise from $33.4 trillion to $46.1 trillion, marking a growth of 38 percent.

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