For a part--only a part--of that story is that pension fund assets fall in value when interest rates are low, contributing to that deficit. Thus, as they say, if we have permanently low interest rates then free banking is likely to disappear. Banks typically also find it difficult to lower rates on deposits to below zero, so that lower rates tend to depress margins. Another point made is that low interest rates threaten traditional pensions funds. Perhaps the macroeconomy requires low interest rates for a long, long time.

Source: Forbes April 07, 2017 08:37 UTC