Life insurers are the real yieldbugs

Pseudonymous banking expert Johannes Borgen recently discussed the impact of low interest rates on European life insurers. Because insurers discount the value of their liabilities, low rates are a huge problem.

But as Johannes Borgen points out, the regulator lets insurers use a hypothetical long term rate that “is a f**** joke. IT IS NOT EVEN REMOTELY LOOKING LIKE REAL WORLD INTEREST RATES ; which mean that all insurer liabilities are grossly undervalued.”

Yikes.

You can read his thread here: https://threadreaderapp.com/thread/1184391852046409729.html

By the way, yieldbug is a term used by Bloomberg journalist Joe Weisenthal to troll people who believe they deserve to receive interest on their risk free investment.