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QE & Ultra-low Interest Rates: Distributional Effects + Risks

Posted By Barry Ritholtz On November 14, 2013 @ 10:30 am In Analysts,Bailouts,Digital Media,Federal Reserve | Comments Disabled

QE mck [1]
Source: McKinsey & Company [2]

 

 

McKinsey [2] has a new study out on the impacts of QE. I have yet to read the full report [3] (or summary [4]) but the graphic above and excerpt below give you some flavor:

The impact that ultra-low interest rates have had on banks has been mixed. They have eroded the profitability of eurozone banks, resulting in a cumulative loss of net interest income of $230 billion between 2007 and 2012. But banks in the United States experienced an increase in effective net interest margins and a cumulative increase in net interest income of $150 billion. The experience of UK banks falls between these two extremes.

 


Article printed from The Big Picture: http://www.ritholtz.com/blog

URL to article: http://www.ritholtz.com/blog/2013/11/qe-ultra-low-interest-rates-distributional-effects-risks/

URLs in this post:

[1] Image: http://www.ritholtz.com/blog/wp-content/uploads/2013/11/QE-mck.png

[2] McKinsey & Company: http://www.mckinsey.com/insights/economic_studies/qe_and_ultra_low_interest_rates_distributional_effects_and_risks

[3] full report: http://www.mckinsey.com/~/media/McKinsey/dotcom/Insights/Economic%20Studies/QE%20and%20ultra-low%20interest%20rates%20Distributional%20effects%20and%20risks/MGI%20QE%20and%20ultra-low%20rates_Full%20report_Nov%202013.ashx

[4] summary: http://www.mckinsey.com/~/media/McKinsey/dotcom/Insights/Economic%20Studies/QE%20and%20ultra-low%20interest%20rates%20Distributional%20effects%20and%20risks/MGI%20QE%20and%20ultra-low%20rates_Executive%20summary_Nov%202013.ashx

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