(PDF)“ paper presented at “The Greenspan Era: Lessons for the Future,” a symposium sponsored by the Federal Reserve Bank of Kansas City, held in Jackson Hole, Wyo., August 25–27).
4  Low interest rates depress net interest margins for banks as the value of their deposit franchise falls, and they boost the present value of liabilities for insurers and pension funds while reducing their prospective returns from fixed-income investments. 5  For instance, inflows into mutual funds, a key determinant of an investment manager’s compensation, are strongly positively correlated with recent fund performance.