Effects of low interest rates on banks and savings banks Let’s begin with the effects of the low interest rates – to be more precise, their impact on banks and savings banks. By now, word will have surely got around that representatives of financial institutions are not very happy with the current low-interest-rate environment.
2  BIS central bankers’ speeches  Graph 3  The ability to issue covered bonds has also helped in the repurchasing of guaranteed debt, as banks can offer investors with AAA mandates an alternative asset to invest in.