Financial repression refers to policies that manage national debt by keeping interest rates artificially low, enabling governments to reduce debt-to-GDP ratios. Following World War II, many countries adopted this approach, leading to a significant decrease in debt ratios from 100% in 1945 to 20% by 1970. Currently, global public debt exceeds $100 trillion, prompting governments to consider financial repression again due to limited fiscal options. While effective short-term, this strategy risks eroding savers’ wealth and has long-term economic implications. The approach includes measures such as interest rate caps and government control over financial institutions.
Financial services
25 March 2025