观点市场

The price of political fragility in markets

Moves in the risk premiums on sovereign bonds depend on how power is organised

The writer is chief economist at Allianz, a senior fellow at Harvard Kennedy School and a member of the French Council of Economic Analysis

For bond investors, political risk in Europe should no longer be considered a defensive afterthought. It is becoming part of core portfolio construction.

Since central banks stepped back from programmes of bond buying in 2022 known as quantitative easing, the sensitivity of sovereign debt markets to political fragility has jumped.

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