Daily Business Report

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World’s Second Largest Reinsurer Buys Gold, Hoards Cash To Counter Negative Interest Rates Posted: 17 Mar 2016 05:59 AM PDT The world's second-largest reinsurer, German Munich Re which is roughly twice the size of Berkshire Hathaway Re, is boosting its gold reserves and buying gold in the face of the punishing negative interest rates from the European Central Bank, it announced today. As caught by Mark O'Byrne at GoldCore and reported by Thomson Reuters this afternoon, the world's largest reinsurer is far from alone in seeking alternative investment strategies to counter the near-zero or negative interest rates that reduce the income insurers require to pay out on policies. Munich Re has held gold in its coffers for some time and recently added a cash sum in the two-digit million euros, Chief Executive Nikolaus von Bomhard told a news conference. "We are just trying it out, but you can see how serious the situation is," von Bomhard said. The ECB last week cut its main interest rate to zero and dropped the rate on its deposit facility to -0.4 percent from -0.3 percent, increasing the amount banks are charged to deposit funds with the central bank. Read the entire article

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