Counting the cost

Until recently, bank disintermediation has been the great white hope of the European corporate bond market, but changes such as the removal of Landesbank guarantees in Germany and Basel II are turning this phenomenon into more than just a pleasant pipe dream of bond originators. Sara-Louise Boyes reports.

Everybody agrees that bank disintermediation in Europe is inevitable, but the pace at which it will happen is rather less certain. Do changes in loan margins in Europe provide an indication that disintermediation is today firmly taking hold? And in that key European market, Germany, what evidence is there of corporates taking to the bond market as relationship lending becomes eroded? Until recently, disintermediation in Germany has hardly ranked as a phenomenon to sit up and take note of, but a