Filling the inflation gap

Even though inflation is at record lows in many countries, inflation-linked instruments are surging in popularity among investors, and, increasingly, issuers.

Global banks are hoping to bring a new group of issuers – companies – into the inflation-linked bond and derivatives market. The banks are offering advice on the measurement and management of risk exposures to inflation to help convince corporate executives to raise funds in this relatively niche market. Banks are being so aggressive about developing the corporate issuance market because there is a massive imbalance in the inflation-linked securities market.

“There is demand for inflation