The revival in the market for bank senior debt following the European Central Bank’s latest liquidity injection may only have disguised a deeper trend. Beneath the rally, there seems to be a general loss of confidence among investors in the idea of large cross-border banks as a diversified play on the global real economy.
Specialist credit funds buying assets ranging from commercial real estate loans through to high-yield bonds are seeing substantial inflows. European pension and insurance giants are following the example of their US and Japanese peers and beginning to step up their own direct lending and debt origination desks.
