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"Many closed-end funds have high yields and are more susceptible to rising interest rate environments and worsening credit conditions," he said.
Goldman did not especially gain any advantage from the current low interest rates, he said, because it used financial hedging to thrive in both low and high interest rate environments.
The governor of the Bank of England told the last day of the Davos meeting of the World Economic Forum that he could receive daily risk positions of the banks to monitor any stresses in the system as he admitted persistently low interest rate environments could cause investors to take risks.
For many people, "this has to be one of the most frustrating interest rate environments, because the yields are so low that you have to be careful not to just reach out and take on more risk just to get a better yield," said Edward Yardeni, an investment strategist.
The paper, presented at a Brookings Institution conference, also noted potential costs including, "distortions in the composition of investment, impacts on the health of the financial sector, and impacts on the distribution of income, and the historically clear tendency of low-interest rate environments to give rise to asset market bubbles".
You have different interest rate environments.
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"What benefits us is definitely a low interest rate environment.
"We are in a rising global interest rate environment," said Geoffrey Dennis, Latin America equity strategist for Salomon Smith Barney.
"That is a challenging hurdle in today's low interest rate environment.
"Stock markets always find it hard to adjust to a higher interest rate environment," he added.
"The mortgage business has gotten really crushed in this rate environment," Mr. Ryan said.
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