Pension Funds and Financial Repression
Pension funds in some economies are used as a captive audience to channel capital at below market rates to government. This policy is only one tool in the financial repression toolkit, but it is receiving increased attention as governments around t...
| Main Authors: | , , |
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| Format: | Report |
| Language: | English |
| Published: |
World Bank, Washington, DC
2021
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/428481620721045342/Pension-Funds-and-Financial-Repression http://hdl.handle.net/10986/35584 |
| Summary: | Pension funds in some economies are used
as a captive audience to channel capital at below market
rates to government. This policy is only one tool in the
financial repression toolkit, but it is receiving increased
attention as governments around the world struggle to
increase fiscal space and reduce their sovereign debt burden
as they rebuild their economies after the pandemic. First,
this paper provides an analysis of financial repression
using pension funds from a historical perspective. It then
assesses the welfare and distributional implications of this
policy and distills lessons learned from a variety of
advanced and emerging economies. The wide range of possible
interventions and idiosyncratic country conditions make a
general set of policy recommendations elusive, but the paper
suggests four high-level principles that can help
policymakers assess the costs and benefits of implementing
policies that employ pension funds as a captive audience for
financial repression. 1 |
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