Editor's letter

The Group of 26’s ‘improving market standards’ had three failings that allowed it to be portrayed as a lunatic fringe by issuers and investment banks. The first issue was that it was seen as being driven by UK institutions. As such it was portrayed as a group of sterling investors shouting loudly but carrying a very small stick. Furthermore, 24 of the 26 firms behind the group came from just three countries – France, the Netherlands and the UK. No German, Italian or Spanish firms signed up. The other two signatories were in Scandinavia and Switzerland.

The second problem was that there was no body around which the proposals could be discussed; critics saw G26 as an amorphous group with no centre.

Third, the proposals were quickly portrayed as a list of demands – this publication’s ‘bondholder ultimatum’ description probably did little to help.

So the Group of 26’s demands were painted as akin to those from the anti-globalisation protestors – aggressively presented and representing a small, poorly organised minority. And by denying benefits to the corporate bond market and being seen as meddling in someone else’s affairs, the May Day Protest image of the G26 was complete.

However, the news that German fund managers are set to release their own proposals has turned the situation on its head. These proposals represent all of Germany’s largest investors; they are being organised by the BVI, a trade body that represents German asset managers; and they are being portrayed as suggestions, not demands. What’s more, the BVI is contacting other industry bodies around Europe to also produce proposals or to sign up to the existing proposals. It looks as if the May Day riots just became more serious.