Currency risks or divergent monetary policies no longer disturb the euro-area-wide diversification. In terms of outstanding amounts, the euro-denominated bond market is still significantly smaller than that denominated in US dollars. But in terms of new issuance, both markets are on a par. One reason for that is the sharp rise in the new issuance of corporate bonds.
Here again, diversification within the euro area has increased. The issuers' nationality, as a determinant of the yield and performance of bonds, has been superseded by other factors, especially by a sectoral view. Country diversification is being substituted by industry diversification. The volume of German government bonds is second in Europe only to the Italian bonds.