Italian teacher Elisabetta Trevisan, like many small investors, bought Italian bonds due to high returns and concern about inflation, leading to a rise in domestic retail bond holdings.

It's reported that the share of domestic small investors in Buoni del Tesoro Poliennali (BTPs), Italy's medium-to-long-term Treasury bonds, increased from 6% in mid-2022 to 13.5% by October 2023, the highest level since 2014. This surge is driven by investors seeking to avoid high inflation rates and help with the country's massive public debt pile. However, analysts predict this trend might slow down in 2024 due to potential European Central Bank interest rate cuts, which could make Italian government bond yields less attractive to small savers. Additionally, banks may offer more competitive rates on deposits to encourage customers to keep their money in bank accounts instead of investing in BTPs.

February 16, 2024
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