When the central banks began printing money, they bought loans, which is equivalent to an increase in the supply of loans. The price of a loan (interest rates) decreased. Low interest rates benefit borrowers, and hurt lenders:
The winners:
- From 2007 to 2012, governments in the eurozone, the United Kingdom, and the United States collectively benefited by $1.6 trillion both through reduced debt-service costs and increased profits remitted from central banks (exhibit).
- Nonfinancial corporations—large borrowers such as governments—benefited by $710 billion as the interest rates on debt fell.
- Although ultra-low interest rates boosted corporate profits in the United Kingdom and the United States by 5 percent in 2012, this has not translated into higher investment, possibly as a result of uncertainty about the strength of the economic recovery, as well as tighter lending standards.
The losers:
- Meanwhile, households in these countries together lost $630 billion in net interest income, although the impact varies across groups. Younger households that are net borrowers have benefited, while older households with significant interest-bearing assets have lost income.
Well would there really be any "winners or losers" if we let the market fix itself and bring it back to equilibrium? Eventually the low rates would create an excess of borrowers and rates would start climbing again until the right number was reached where supply meets demand. But the central banks had to go print money and meddle with the market forces;)
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