A FRESH BREEZE IN EUROPE'S DEBT MARKETS
The flap over the radical re-ordering of the UK gifts market this month has obscured another, equally important revolution in the rest of Europe: the movement by governments - hesitantly in some cases, more boldly in others - down a similar route toward liberalization of their fund-raising mechanisms.
This shake-up of domestic state securities markets is frequently being stimulated by the US investment banks which smell profit in the inefficient, sleepy little government bond markets in Europe. As a guide to this new game, Euromoney has compiled a table detailing the state of play in 16 government debt markets.
One of the first to make major changes was the German Bundesbank. In 1984, after years of protection, which had allowed the large German banks to control the market, the regulators removed the coupon tax that had blocked foreign investment. This was followed, four months ago, by the decision to open up the syndicate which places government securities, allowing foreign banks to take a 20% slice of the issuing market. The hegemony of Deutsche Bank and the other resident houses in the placement of German government bonds has already been broken by the aggressive foreign newcomers, led by CSFB-Effectenbank.