[ThrustVectoring]

Savers are counter-parties to debtors. Every debtor that consumes real goods and services now in exchange for forgoing later consumption gets paired with a saver that forgoes current consumption in exchange for later. The market has to clear, and the price is the risk-free rate of return. More people interested in saving? The natural effect of this pressure is to drive interest rates and credit standards down until you find enough people interested in borrowing.

Equity is fundamentally in the same boat - it's really the same thing as a loan, except the repayment term is a percentage of the economic output of a business venture. There's even some cool math-y economics about how the value of a firm doesn't change when you change the capital structure, so replacing $100M of equity with a $100M corporate bond just shifts risks from bondholders to shareholders.

Anyhow, the short story is that the West is having fewer children later. This means fewer currently-productive members of society per retiree. So, larger amounts of savings/debt required, which means better terms need to be offered in order for the market to clear.

[haihaibye]

Interest rates aren't set by a free market.

[vkou]

The prime rates aren't, but the rates at which the overwhelming majority of debt is issued are.