12/23/2014 - Morgan Stanley on Financial Repression

From last year but mostly still relevant, provides insight into what financial repression is & what the investment implications are .. looks at financial repression as:

• Explicit or indirect caps / ceilings on interest rates

– Government regulation in the U.S.
– Ceilings on bank lending rates
– Central Bank interest rate targets

• Creation and maintenance of a captive, domestic investor base

– Capital account restrictions and exchange controls to force a ‘home bias’
– High reserve requirements
– Regulatory measures that require financial institutions to hold government debt in their portfolios
– Transaction taxes on equities; prohibitions on gold transactions

• Direct ownership of, or extensive management over, banks and other financial institutions

– Restriction of entry into financial markets
– Directing credit towards certain industries

LINK HERE TO THE ARTICLE

Disclaimer: The views or opinions expressed in this blog post may or may not be representative of the views or opinions of the Financial Repression Authority.