Carlos Miguel Aguiar da Glória
- 27 May 2026
- FINANCIAL STABILITY REVIEW - BOXFinancial Stability Review Issue 1, 2026Details
- Abstract
- The box examines euro area investors’ activity in euro area government bond (EGB) markets in response to changes in the slope of the yield curve. Investors are unevenly exposed to different maturities along the EGB yield curve, with non-bank financial institutions playing a particularly important role at the long end. Exploiting granular data on sectoral holdings of sovereign bonds, the analysis shows that euro area investors in EGBs react more strongly to changes in yields in other maturity segments than to changes in yields for the bonds they currently hold. As a result, shifts in the yield curve may trigger portfolio rebalancing across maturities, with non-banks acting as stabilisers of the long end of the curve. The box also documents foreign hedge fund activity in euro area government bond futures markets, highlighting persistent short positions in ultra-long maturities throughout 2025.
- JEL Code
- G11 : Financial Economics→General Financial Markets→Portfolio Choice, Investment Decisions
G15 : Financial Economics→General Financial Markets→International Financial Markets
G22 : Financial Economics→Financial Institutions and Services→Insurance, Insurance Companies, Actuarial Studies
G23 : Financial Economics→Financial Institutions and Services→Non-bank Financial Institutions, Financial Instruments, Institutional Investors