The yield curve on European government bonds is set to flatten or even invert from March this year as new regulations force the region's second-largest group of pension funds to change the profile of their assets.
Under new solvency regulations, Dutch pension funds will be required to match their assets and liabilities better after the poor performance of equities over recent years. That means they will become keen buyers of long-dated government bonds with maturities of between 10 and 30 years.
ABN Amro says the impact on the yield curve will make it even...
