Economics

European Funds' Bond-Buying `Tsunami' Is Set to Fade on ECB

ECB spurred 400-billion-euro annual outflows: Oxford Economics
Phasing out of ECB stimulus seen spurring funds back home

Pedestrians cast shadows as they walk in central Milan, Italy, on Monday, Sept. 25, 2017. The Italian government sees the country's debt load starting to fall this year as the economy heads into a three-year stretch of 1.5 percent annual growth.Photographer: Stefan Wermuth/Bloomberg

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By Chris Anstey

December 14, 2017 at 3:04 AM UTC

Updated on

December 14, 2017 at 11:05 AM UTC

This article is for subscribers only.

European investors have been plowing so much capital abroad they’ve taken up about half the boom in U.S. corporate debt in recent years, but now that liquidity tap is poised to be shut off, according to Oxford Economics.

"The global debt issuance boom is likely to lose steam, given the extent to which it has relied on the support of European investors," Guillermo Tolosa, an economic adviser to Oxford Economics in London who has worked at the International Monetary Fund, wrote in a research note released Friday. "Issuers better seize the opportunities while they last."