Aufsätze Ökonomik

Aufsätze Pädagogik

Aufsätze Sozialethik


Prof. Dr. Gerhard Merk, Dipl.rer.pol., Dipl.rer.oec.

Abhandlungen über Johann Heinrich Jung-Stilling

Nachtodliche Belehrungen zur Ökonomik

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Nachtodliche Belehrungen zur Philosophie

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Hunt for returns, chase after returns

A tendency to take high risks in order to generate returns, particularly in an environment of low interest rates. – Insurance companies that have promised their customers a minimum interest rate get into a tight spot when the interest rate on deposits is close to zero; this is because they have to pay higher interest rates than they receive for the conventional investment of incoming premiums. So they will try to take exposures that promise a higher rate of return – but also a higher risk of loss, according to the risk-return principle. For example, they will grant loans to financial investors or become active on commodity markets, insofar as this is permissible under supervisory law. – Financial investors in particular are now having to turn to riskier commitments, and experience shows that these companies are taking on a considerable amount of debt. If they now find themselves in a liquidity squeeze, they are forced to sell their assets at any price. This has multiple effects on the corresponding markets and easily brings the financial investor himself to ruin. This danger is so great because the shadow banking sector has not yet been monitored by the supervisory authorities. – See Banking Regulation Paradox, Financialization, Secret Tip, Same Business – Same Rule Principle, Go-go Funds, Hell-and-Flood Contract, Junk Bonds, Penny Stocks, Pump and Dump, Risk Capital, Risk Propensity, Shadow Bank Terror Securities, Trembling Premium. – Cf. 2013 BaFin Annual Report, p>. 118 ff. (problems of insurance companies and pension funds in a low interest rate environment on the one hand and Solvency II on the other).

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University Professor Dr. Gerhard Merk, Dipl.rer.pol., Dipl.rer.oec.
Professor Dr. Eckehard Krah, Dipl.rer.pol.
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