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Wöhrmann pointed to relatively high inflation levels and, more importantly, the negative real yields on bonds issued by the US, Germany, the UK and Finland as evidence of today's efforts at financial repression. Despite its constraints against direct monetisation of debt, the ECB's LTRO process is also manipulating rates in Europe, he added.
While he noted that DWS's clients were taking a direct "wealth hit" from these actions, he also drew attention to how repressive measures have manifested in Europe's pensions industry. In addition to Solvency II, Wöhrmann listed France's transformation of its pension reserve fund, FRR, into a "captive buyer of French official debt"; Ireland's use of its National Pension Reserve Fund to recapitalise its banks; and the transferral of the previously privatised Portugal Telecom's pension scheme back under government control.
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