IMF RESEARCH WARNS OF A COMING WAVE OF FINANCIAL REPRESSION AS GOVERNMENTS STRUGGLE WITH SOARING DEBT A new IMF working paper examining 100 years of data across 17 advanced economies finds that governments have historically reduced debt burdens by pressuring banks to hold government bonds at below-market returns. Key findings: - Governments use banking regulations, reserve requirements, and other policies to create captive buyers of sovereign debt, effectively transferring wealth from savers to the state. Financial repression peaked after World War II, declined during financial liberalization, and has risen again since the 2008 financial crisis. - These policies are associated with reduced private lending and investment as banks allocate more capital toward government debt. The researchers warn that conditions historically associated with financial repression, including elevated government debt and fiscal pressures, are present again today. The paper concludes that financial repression may become increasingly common as governments seek ways to manage their growing debt burdens.