Monetary Policy with Low Interest Rates: Drivers and Implications
Petra Gerlach, Head of Monetary Policy Analysis, Swiss National Bank
Current Situation
Interest rates in advanced economies were already low, or even negative, before the start of the Covid crisis. The crisis has added further downward pressure on these rates and has had numerous other implications, including a sharp increase in government debt. There is significant uncertainty regarding the recovery from the current crisis, concerning future growth, future inflation, and future interest rates. This creates a challenge for central banks and governments, but also for the financial sector.
Objective
The Master Class provides the background to understand the current environment and future potential scenarios. It will take a global perspective, but also put a special emphasis on Switzerland, and will allow participants to sharpen their understanding of the drivers of global interest rates.
The class will start by reviewing the recent evolution of various types of interest rates and the debate around the causes behind the decline. We will discuss the recent strategies of the main central banks to loosen monetary policy in this environment. Special attention will be given to the evolution of yield curves and bank rates in a setting with negative policy rates. Participants receive the opportunity to exchange how this affects their daily business and how they cope with the situation.
Regarding future prospects, we will review the options available to central banks and the interactions between monetary and fiscal policies. In discussing the recovery from the Covid crisis, we will examine the problems generated by the ballooning of government debts and the differences across countries. We will also cover the recent debate about inflation expectations.
Target Audience
The Master Class is aimed at professionals in the financial industry who are interested in central bank actions, in global economic questions, and/or are focusing on fixed income investments.
SAQ Recertification
This Master Class is an acknowledged SAQ recertification measure for the CWMA, CCoB, Affluent-, SME-, and Individual Client Advisor profile and comprises four learning hours.