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Since 2008 crisis and its related uncertainties, individuals and companies have significantly increased their savings, and they have looked for secure investments as decoupled as possible from financial turmoil risks. Institutional investors (e.g. pension funds, insurance companies, or mutual funds) have endured, in general, significant losses, and have, therefore, increased their appetite for more secure long-run assets with stable cash flows.
In the meantime, governments have increased their public deficits to keep economic activity alive, and this has occurred despite the risk to see their ratings lowered, and the resulting increase in financing costs. This increasing need for public funding together with the tougher capital requirements for banks imposed by Basel III,...
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