(no subject)

[timelets]

The fundamental nature of banking is to borrow short and lend long. Having overnight borrowing rates that are higher than 10-year bond yields turns everything upside down, resulting in collapsing net interest margins and profitability.

It creates even bigger problems for the continent’s savings industry. Pension funds and insurers in need of long-term assets to match their liabilities have been forced into a hunt for any positive yield. With the ultra-long yields plunging too, where can they turn now?

https://www.bloomberg.com/opinion/articles/2019-08-08/ecb-is-dragging-the-bond-market-deeper-into-yield-curve-madness

Now, banks compete with governments as liquidity suppliers.