Bond Markets Once Felled Governments. Now Negative Yields Rule
- Governments don’t feel market pressure to put houses in order
- Risks increasingly migrate from countries to asset owners
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It was November 2011 and Silvio Berlusconi’s back was to the wall.
Italy’s 10-year bond yields were spiking above 7% and the prime minister was stalling. Summoned to a room on the sidelines of the Group of 20 summit in the French Mediterranean resort of Cannes, Berlusconi was confronted by Angela Merkel and Nicolas Sarkozy. They demanded to know what he was going to do to convince markets and halt the contagion -- but received little reassurance.