Protectionism a big threat to global economy, says Larry Fink

T​he spectre of protectionism and the destructive impact of negative interest rates, pose serious threats to the world economy, says BlackRock chief executive Larry Fink.
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Mr Fink, who heads the world’s largest money manager, said negative rates — coming on top of eight years of low rates — eroded people’s ability to save for retirement and stored up trouble for the future. The European Central Bank on Thursday delivered a 10-point cut to minus 0.4 per cent

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He noted that 80 per cent of German retirement savings were invested in bonds, not equities. He was “hostilely against” negative rates, but saw them lasting a couple of years.
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Donald Trump, the Republican frontrunner, has railed against US companies that have transferred production to lower-cost Mexico and China and has vowed, if elected, to bring back jobs and stop the US getting “killed”. Mr. Trump has also promised to barricade the US border and deport 11m undocumented migrants.

Mr. Fink called such protectionist rhetoric “a knee-jerk” reaction but warned: “It would put the global economy into a recession.” He said the squeezed middle class were making their dissent felt not only in the US but in election campaigns in Spain and in the upcoming vote on Britain’s future in the European Union.

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