Germany ABS Market Outlook

the germany abs market is expected to go through some major changes in the next decade. in 2018, it is likely that investors will become increasingly cautious about putting their money into german abs instruments as changes in europe’s banking regulations have led to greater risk exposure. as a result, the current market mood is that investors are becoming more risk averse and are placing greater emphasis on safety. however, this could also pave the way for a strong investment opportunity for investors who understand the fundamentals of the market and have experience in the asset class. fixed-income investors should be aware of the liquidity associated with germany abs instruments, as well as the importance of credit risk when taking on such investments. additionally, eurozone issues have affected investor sentiment in the abs market, and it is likely that german investors will remain wary of broader macroeconomic events. recent policies introduced by the european central bank (ecb) have led to greater economic uncertainty and investors are likely to remain watchful of any potential spillover effects from sms banking, quantitative easing and other changes. on top of this, ratings agencies have made a concerted effort to strengthen their apr and credit-rating framework by focusing more attention on asset-backed securities in europe. this has made it easier for investors interested in german abs to assess the risks associated with their investments. in the longer term outlook for germany abs, investors may benefit from a more favourable lending environment as market participants become more comfortable with impaired assets from the eurozone. although european banking regulations have restricted borrowing for some, new regulations could open up more ways for borrowers to finance their businesses. overall, while the outlook for the germany abs market in the next decade is uncertain, investors should keep a close eye on the region’s banking regulations, credit risk and liquidity risks when looking for investments. a solid understanding of the fundamentals of the market, as well as an understanding of the current regulatory environment should help to identify strong investment opportunities in germany abs.