As a result, conditions in the covered bond markets are an important determinant of banks’ ability to extend credit to their own customers. Sovereign bonds With regard to the third market segment which I would like to discuss, sovereign bonds, we can distinguish at least three ways in which they affect monetary policy transmission.
The customer relationship is still the ultimate source of value for banks – perhaps even increasingly so when factors such as distance and market fragmentation fade and cannot be used as engines of market power.