Negative Interest Rates: Sharp Increase in Risk-Taking Behavior

Courtesy of Maren Baars, Henning Cordes, and Hannes Mohrschladt As a consequence of the global financial crisis and the European sovereign debt crisis, risk-free nominal interest rates have plummeted – in some countries, they even turned negative. These interest rate decreases lead to a systematically higher risk appetite by institutional investors, such as banks and […]