In the United States, the yield on 10-year Treasury bonds is near all-time lows, with the same being true in the euro area, the United Kingdom, and Japan (figure 1). Yields have also declined in many emerging markets, with interest rates falling almost 400 basis points in Korea since the financial crisis and by a similar amount in Israel.
After a deep financial and economic crisis, we now see the restart of the European process, building on the agreement of the June 2012 Summit. This process ultimately entails some transfer of national sovereignty in the areas of budget and structural policies. And the efforts made by Germany and France in this regard are particularly encouraging.