ECB | Who are the “bond vigilantes” on sovereign debt markets? | European American Chamber of Commerce New York [EACCNY] | Your Partner for Transatlantic Business Resources Who are the “bond vigilantes” on sovereign debt markets?

ECB | Who are the “bond vigilantes” on sovereign debt markets? | European American Chamber of Commerce New York [EACCNY] | Your Partner for Transatlantic Business Resources Who are the “bond vigilantes” on sovereign debt markets?

By Pablo Anaya Longaric, Katharina Cera, Georgios Georgiadis and Christoph Kaufmann Investors who sell off sovereign bonds in times of stress are commonly referred to as “vigilantes” as they punish governments for what they consider to be bad policy choices. This post finds that investment funds account for most net sales of sovereign bonds in such times. Financial markets are sensitive to macroeconomic and political news, especially given the …