Retail Bond Markets in Europe: Market Potential and the Role of Regulation

by Anshuman Jaswal, PhD, March 21, 2011
Industry Trends
EMEA

Abstract

Retail participation in a securities market improves the depth of the market and allows retail investors to balance their portfolios. However, the retail fixed income market in Europe is still nascent, with the exception of Italy, and possibly Spain.

In a new report, Retail Bond Markets in Europe: Market Potential and the Role of Regulation, Celent looks at the role of retail investors in the leading fixed income markets across Europe and examines ways in which participation can be encouraged.

There is potential for growth of trading. The following figure looks at the share of retail asset allocations in Europe of clients of intermediary distributors (insurance companies, private banks, retail banks, independent financial advisors, and funds of funds). Fixed income had a 32% share, following equity at 47%.

“Europe has a high level of indirect retail participation in the fixed income market, which needs to be harnessed to encourage retail bond trading,” says Anshuman Jaswal, Celent Senior Analyst and author of the report. “The success of the Italian market is a testament to the role fiscal incentives can play.”

The report begins by looking at the overall European market and considering the share of fixed income in retail asset allocation. Within this, the report considers the breakdown in terms of the share of government and corporate bonds. After taking a look at the European picture, the report goes on to address each of the leading markets: Italy, Spain, France, the UK, and Germany in turn.

The 30-page report contains 16 figures and one table.

Celent is a research and advisory firm dedicated to helping financial institutions formulate comprehensive business and technology strategies. Celent publishes reports identifying trends and best practices in financial services technology and conducts consulting engagements for financial institutions looking to use technology to enhance existing business processes or launch new business strategies. With a team of internationally based analysts, Celent is uniquely positioned to offer strategic advice and market insights on a global basis. Celent is a member of the Oliver Wyman Group, which is a wholly-owned subsidiary of Marsh & McLennan Companies [NYSE: MMC].

Media Contacts

North America
Michele Pace
mpace@celent.com
Tel: +1 212 345 1366

Europe (London)
Chris Williams
cwilliams@celent.com
Tel: +44 (0)782 448 3336

Asia (Tokyo)
Yumi Nagaoka
ynagaoka@celent.com
Tel.: +81 3 3500 3023

Table of Contents

Executive Summary

3

Introduction

5

Market Overview

6

 

Fixed Income in Leading Markets

7

 

Spain

8

 

France

9

 

UK

10

 

Germany

11

 

Initiatives to Encourage Retail Trading in Europe

11

The Leading European Market: Italy

14

 

Mercato Obbligazionario Telematico (MOT)

16

 

EuroTLX

18

 

BondVision

20

 

Hi-MTF

22

Conclusion

24

Leveraging Celent’s Expertise

26

 

Support for Financial Institutions

26

 

Support for Vendors

26

Related Celent Research

27

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