##ing the errors. cost associated with foreclosure documentation problems, including “ robo - signing ” ( discussed in more detail later ), are not the only potential liabilities facing financial institutions. investors in mortgage - backed securities and purchasers of unsecuritized “ whole loans ” have begun to explore and in some cases assert contractual and securities law claims against the parties that originated the loans, sold the loans, underwrote securities offerings, or had other roles in the process. the essence of these claims is that the mortgages in the securitization pools or that had been sold as unsecuritized whole loans did not conform to the representations made about their quality – specifically, that the loan applications contained misrepresentations or the underwriting was not in conformance with stated underwriting guidelines. with respect to the contract claims, this potential liability is usually called “ put back ” risk, because many of the relevant agreements permit the buyer of the loans to put the loans back to the seller ( or other party that makes representations ). that is, the buyers can demand that the seller repurchase the loans at par if defects are found in the loan underwriting contrary to representations and warranties in the pooling and servicing agreement that created the securitization trust or the whole loan mortgage purchasing agreement. at the time of the putback, the loan has usually gone into default, sparking a review of the original loan application file. the defaulted loan, given current market conditions, is typically worth substantially less than par, thus the put - back transfers any potential loss from the buyer back to the seller. although the representations and warranties in the various agreements vary considerably, they frequently require that the defect materially and adversely affect the value of the loan before put - back rights can be exercised. there are also pending claims by some that underwriters and sponsors of securitizations failed to comply with the federal securities laws covering offering documents and registration statements. these suits specifically reference descriptions of the risks to investors, the quality of assets in the securitization, the order in which investors would be paid or other factors. most of these lawsuits are in the early stages, and it is difficult to ascertain the probability that investors will be able to shift a substantial portion of the losses on defaulted mortgages, specifically, or mortgage - backed securities back to the parties that sold the loans or underwrote the offerings. nevertheless,

even more pronounced than that in switzerland. what are the causes? i would like to highlight some factors i consider particularly important. to some extent, this development is due to the fact that since the 1990s the efforts of central banks in the advanced economies to bring down previously high inflation rates have been increasingly successful. as a result, the markets deemed the central banks ’ pledge to maintain price stability to be credible. inflation expectations consequently became anchored at a much lower level than before. the amount of interest that investors would normally demand as compensation for future inflation thus also decreased. if this reduction in interest rates were to be taken into account accordingly in the aforementioned pension fund parameters, the lower return would not in itself be fundamentally problematic for the pension funds, as their invested capital would also be subject to less inflation. in recent decades, however, the real rate of interest – i. e. the nominal interest rate less consumer price inflation – has likewise been falling ( cf. chart 3 ). as central banks have only limited influence on the development of the long - term real rate of interest, other factors must have been at work. first, population ageing in the advanced economies has resulted in an increased propensity to save, which in turn has increased the supply of investable capital. 4 the percentage rate applied to retirement savings to calculate the annual old - age pension. the minimum rate for the interest payable on retirement savings. the parameters apply first and foremost to mandatory insurance cover. under the bvg, it is the portion of a salary between chf 24, 885 and 85, 320 ( the ‘ coordinated salary ’ ) that has to be insured. however, many pension funds pay benefits over and above this statutory minimum ( ‘ non - mandatory ’ pension insurance ). pension funds that provide ‘ comprehensive ’ insurance cover in excess of the minimum benefits prescribed by law can define a conversion rate applicable to all retirement savings, provided the pension actually paid is at least as high as the pension payable under the mandatory insurance. if life expectancy increases while the retirement age stays the same, the number of post - retirement years rises. thus employees have to save more money than previously if they are to be able to spend the same amount each year in their old age. page 3 / 8 second, productivity growth is declining. 5 this reduces the return potential of investments and hence also the demand for capital to finance investments. the real rate of interest had to fall in order to balance supply and demand on