In this context, pension funds – similar to other long-term institutional investors – may also contribute to the efficient monitoring of listed firms with favourable effects on transparency and corporate governance, which hence should enhance the market discipline of the euro area corporate sector.
In spite of the overall trend towards a more diverse investment portfolio, the pension-fund asset allocation still differs significantly across countries, as illustrated in Chart III. For example, investments in the bond market remain the pre-dominant option for pension funds in most of the Central and Eastern European countries, whereas stock market placements are particularly important in the Anglo-Saxon countries and notably in Sweden.