Unless the fund's assets are also placed in bonds, movements in bond rates will affect the solvency position from year to year, which in turn will affect corporate results. At the same time, stricter pension rules now require any measured funding gap between assets and liabilities to be made good more quickly than used to be the case.
Deposit outflows in December mirrored the strong sales of government and private sector securities by euro area MFIs, which, in part, could be related to adjustments by banks in anticipation of the ECB’s comprehensive assessment of banks’ balance sheets. These developments also affected annual growth in M1, which moderated to 5.8% in December but remained strong.