This is an issue that might be challenging to institutional investors such as pension funds, as rules limit their ability to invest in riskier assets. On the other hand, search for yield and higher returns might make some investors to take on excessive risk. Central banks’ asset purchase programmes are not the only reason for the globally low interest rate environment.
In any case, medium term profitability of pension funds may be challenging in the low interest rate environment. For those companies that have in past made contracts with high return guarantees, the low interest rate environment is particularly difficult.