Yields on sovereign bonds in Europe have edged so close towards negative territory this year that U.S. investment bank Goldman Sachs has called it the “new normal” in the region.
Over 2 trillion euros ($2.1 trillion) of outstanding euro zone sovereign debt now has a negative yield, according to calculations by the bank.
This means that investors with these assets are effectively paying for the privilege to hold what many see as a “safe haven” instrument, hoping that someone else will be willing to pay more for the asset in the future, rather than it expiring and them losing money.
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