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

Prolonged cheap borrowing costs would hit earnings and force financial institutions to change business models, study says

A prolonged period of low interest rates will tempt banks to take greater risks and sound the death knell for final salary pensions, the International Monetary Fund has warned.

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.

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