The Incredible Upside Down Fixed Income Market Negative Interest Rates and Their Implications

This book PDF is perfect for those who love Business & Economics genre, written by Vineer Bhansali and published by CFA Institute Research Foundation which was released on 28 March 2024 with total hardcover pages 107. You could read this book directly on your devices with pdf, epub and kindle format, check detail and related The Incredible Upside Down Fixed Income Market Negative Interest Rates and Their Implications books below.

The Incredible Upside Down Fixed Income Market  Negative Interest Rates and Their Implications
Author : Vineer Bhansali
File Size : 40,6 Mb
Publisher : CFA Institute Research Foundation
Language : English
Release Date : 28 March 2024
ISBN : 9781952927195
Pages : 107 pages
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The Incredible Upside Down Fixed Income Market Negative Interest Rates and Their Implications by Vineer Bhansali Book PDF Summary

In recorded financial history, there are almost no occasions, other than the present, where a significant portion of the global bond markets has been trading at negative nominal yields. Is this an anomaly or what will be the normal state of the financial markets in years to come? This monograph investigates the ongoing debate between the pros and cons of negative nominal yields and the economic rationale(s) that are used to justify or criticize underlying policies. Even in academic circles, few agree on the costs and benefits of negative yields. Surveying the global bond markets of the day, I find the impact of negative yields in almost all regions and sectors, though sovereign bond markets, which are closest to monetary policy, are the dominant category of bonds with negative yields. I next look at the participants in the negatively yielding bond market and at the motivations that justify their actions. The conclusion is that although different participants might have different reasons to buy negatively yielding bonds, their collective action is certainly responsible for creating a local equilibrium in which these markets clear. Central bank policy is the next focus in this monograph, and I discuss in depth the economic rationale as propounded by one such bank, the European Central Bank. I conclude with a discussion of the blurring lines between monetary and fiscal policy, which are likely to become centerpieces in future years as global sovereign debt levels rise. Next, I look at the influence of negative yields on other asset markets, such as equities, and especially derivatives markets, such as the demand for options. A discussion of potential risks then follows. The monograph concludes with a review of the impact of negative yields on nonfinancial aspects of society. Although the forecast is anything but crystal clear, the evolution of markets and economics in the years to come will undoubtedly be influenced by this massive economic experiment of negative yields.

The Incredible Upside Down Fixed Income Market  Negative Interest Rates and Their Implications

In recorded financial history, there are almost no occasions, other than the present, where a significant portion of the global bond markets has been trading at negative nominal yields. Is this an anomaly or what will be the normal state of the financial markets in years to come? This monograph

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