Third, irrespective of the desirable review of the current regulatory framework of sovereign exposures 8, it is in the best interest of banks to reduce their exposure to their respective government, which should increase their willingness to sell.
9 Finally, the third factor that could reduce effective supply is the potential lack of attractive investment alternatives in an environment of compressed credit spreads and the buy-andhold nature of much of the investment community. But note that, at least in the initial phases of the PSPP, international banks and asset managers are the most likely sellers of their euro area government bond holdings.