European Institutions Squeezed by Conflicting Motivations

Research from Greenwich Associates suggests that European institutions investing in fixed income could soon find themselves squeezed between the need to increase returns and efforts by financial regulators to improve transparency and impose stricter standards for best execution. With interest rates at historic lows, institutional investors have begun turning to complex instruments that can boost returns while hopefully mitigating some risks. A report from Greenwich Associates analyzes European fixed-income investors’ move into complex products such as credit and interest-rate derivatives, CDOs, and other structured products, and examines the role that the uncertain regulatory environment is playing in the decision-making within these institutions.

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