In response to a poll at our inaugural Fixed Income Forum held in London last week, the vast majority (91%) of fixed income executives polled said they felt quantitative easing has caused a distortion of global markets. However, three quarters (75%) of those present also agreed that quantitative easing has had a positive effect on the overall global economy.
“Quantitative easing has had a profound impact on markets and our poll shows this is being felt across the fixed income industry in Europe,” said Rob Friend, Global Head of Bloomberg’s Fixed Income Business, who delivered the opening speech at Wednesday’s Forum. “The landscape of fixed income is experiencing structural change, with increased regulation and issues surrounding liquidity which are clearly still affecting market participants.”
The poll, which gauged fixed income executives’ outlook on the macroeconomic climate for corporate credit in Europe, revealed:
- More than 60% of respondents expect the compression in corporate credit to continue until at least December 2014 in light of Mario Draghi’s cut to the ECB benchmark rate last week and his pledge to keep borrowing costs low for an “extended period”.
- 61% of respondents do not believe that banks are hoarding liquidity and are under genuine regulatory and capital pressures to rein in lending.
“As fixed income markets evolve, we are continuing to invest in innovation to provide our clients with the best solutions to help them adapt to the new reality,” Friend said.
The Bloomberg Fixed Income Forum 2013 (FI13) brought more than 300 leading buy-side and sell-side fixed income experts to Bloomberg’s EMEA headquarters in London on Wednesday 13th November. Bloomberg’s fixed income team will be hosting the Forum on an annual basis.