Yield compression

New regulations and the eurozone sovereign debt crisis are pushing banks to shore up their balance sheets and retrench. Some banks have had only sporadic access to public debt markets and have taken full advantage of cheap funding from the European Central Bank. Issuance is muted but there are signs of life in the European CMBS market. Gareth Davies, head of European asset-backed securities and covered bond research at JPMorgan, discusses with capital markets correspondent Mary Watkins the outlook for the bank bond market.