Low interest rates put global financial sector at risk, IMF warns

A new study from the IMF said a continuation of the cheap borrowing environment seen since the global financial crisis a decade ago would pose a "significant challenge" to financial institutions and force them to make fundamental changes to their business models.

Although interest rates have recently started to rise in the US, the IMF said Japan's experience suggested an imminent and permanent end to the current low interest rate environment could not be guaranteed. Some economists, such as the former US treasury secretary Larry Summers, say the global economy is gripped by so-called secular stagnation, in which excessive savings and weak investment lead to weaker growth and lower interest rates.