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Bundesbank warns of risks from low borrowing costs

The low cost of borrowing carries risks of excess on financial markets such as those for corporate bonds and syndicated credit, Germany's Bundesbank warned on Tuesday.

"The longer the phase of low interest rates continues, the greater the danger of excess in certain segments of the market," Bundesbank Vice President Claudia Buch said in a statement on the publication of a report on financial stability.

President of the European Central Bank Mario Draghi and Bundesbank President Jens Weidmann
Anadolu Agency | Getty Images
President of the European Central Bank Mario Draghi and Bundesbank President Jens Weidmann

"In particular, there are indications of an exaggerated hunt for return on the markets for corporate bonds and syndicated credit," she said.

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