Easy money from low interest rates is boosting hubris actions. After months of planning bitter survival strategies, the idea of growth is sweet; especially with mergers. This optimistic trend is a sign of a growing economy. However, early warnings on low interest rates are emerging with attention flags on the risks of causing distorted allocation of capital and personnel, excessive risk taking, lopsided balance sheets and destabilising surges in capital flow. Another threat is that cheap money may hinder the necessary elimination of bad debt from the banking system.
The positive or negative consequences of the low interest rates are balanced on a needle. However as the IMF said that interest rates should stay low “for the foreseeable future”; companies can continue to maximise the benefits of low rates without many restrictions.
