German banks face topsy-turvy world of funding and regulation

The last six months have turned the game of debt issuance on its head for German banks and their investors. In October the European Central Bank elbowed its way into the covered bond market as a buyer, building a portfolio that already sits at over €80bn and has pushed many German financial borrowers’ Pfandbrief spreads deeply negative. In March it upped the ante, starting a €60bn a month quantitative easing programme in European government bonds.