Opinions split on EU bond balance sheet squeeze
Some say QT and issuance wave will hamper intermediation; others say dealers nimble enough to respond
Market participants are divided over whether the combination of accelerating European government bond issuance and ongoing quantitative tightening by the European Central Bank (ECB) is straining balance sheet capacity for bond and repo intermediation.
Some argue that surging supply – driven by both national fiscal programmes and new EU-level borrowing – is overwhelming dealers’ ability to
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