Collateralising financial transactions that weren’t collateralised before will naturally create additional demand for safe and liquid government bonds. Central counterparty (CCP) data, for example, suggest that a significant share of assets pledged as collateral for meeting initial margins consists of government bonds.
However, as yields on bonds have fallen relative to the remuneration on cash, more cash is used for initial margins than used to be the case. This elasticity of bond collateral is important to bear in mind when trying to assess the impact of central clearing or bilateral margining of derivatives transactions on collateral demand.