Something had to be done unless the life companies wanted to be left with only term insurance to sell in circumstances where customers were creating their own "permanent life insurance" by combining the high money market yields
with term policies.
First, low short interest rates and bond yields have encouraged cheap borrowing and enabled private equity specialists to leverage themselves up and to purchase companies on valuations that exploit the difference between money market yields
and earnings yields.
In the City, where short-term money market yields
moved sharply higher, the debate centred largely on the timing of any upward move.
Under the current low interest-rate environment, managing 10 billion yen overnight in the call money market yields
only 200 yen, according to the officials.
The sheer weight of liquidity pumped into stocks, low money market yields
, share buy-backs, corporate restructuring, mega-mergers and strong earnings are underpinning equities.
In the intermediate term, M2 velocity--nominal income divided by the stock of M2--tended to vary directly with the difference between money market yields
and the return on M2 assets--that is, with its short-term opportunity cost.
Have changes in interest rates, for example, been reasonable in relation to changes in new money market yields
? If bonuses are illustrated for new policies, is the company setting up reserves for such bonuses or have similar bonuses been paid on any existing contracts?
Tired of money market yields
but afraid to relinquish security?
Analysts said the market opened in the green zone, but institutional profit-taking spurred by economic uncertainty, security concerns in the country and rise in money market yields
dragged it into the negative zone.
However, some research analysts say money market yields
and government borrowing may force the central bank to enhance the key rate but growing consensus us it may decide to maintain the policy rate.
Many larger and well-capitalized credit unions are reporting very strong deposit inflows, but those with low capital levels are discouraging deposits by lowering CD and money market yields
, CUNA Mutual said.