Felix Hufeld: Low interest rates are the main source of concern

The continuing low-interest rates environment in Europe, the United States and the UK is a major source of concern, says Felix Hyuffeld, president of the German financial regulator BaFin. Referring to a recent study, Felix describes the effect of low interest rates on local banks. According to him, the longer the low interest rate period is, the greater the risk for banks when the CBs begin to raise them. Although the banking system is at times more stable than 10 years ago, Huffeld believes that caution and very careful restructuring of monetary policy is needed again.

"One thing is certain - there is no regulatory system or financial market in the world that is not vulnerable, but whether there will be a financial crisis in the future, will there be!" - said Felix Huifeld at the annual bank meeting in Frankfurt on Thursday.

John Cryan, CEO of Deutsche Bank, supported Huffeld and mentioned that it is possible to currently have a bubble in some assets where the risk is more than the expected profit.

Lloyd Blankfein, CEO of Goldman Sachs, expressed his unease by saying, "When corporate bond yields are lower than dividends, it makes me sick."

Source: Bloomberg Pro Terminal

Jr Trader Petar Milanov

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