Secondary market structures

Secondary market data is continuously transmitted through a representative part of the members of the Bund Issues Auction Group. They provide the Finance Agency and with an indicative detailed overview of the secondary market for German Government securities.

The reported turnover of German Government securities and its components provide an insight into the secondary market structure.

A representative share of the reporting member banks report their transactions in German Government securities on a voluntary basis – broken down by type of security traded (Bubills, Schaetze, Bobls, Bunds and inflation-linked securities), region and type of counterparty. The approximate structures of the secondary market can be identified on the basis of these trading volumes and net positions.

The gross trading volume is derived by adding up the reported sales and purchase volumes of the member banks. The net trading volume is the balance of sales minus purchase volumes.

The net positions show the trading position of the member banks after sales and purchases within one category have been balanced. Accordingly, for example a net position of € -22 bn vis-à-vis brokers corresponds to a € 22 bn higher volume of purchases by member banks from brokers than sales to brokers. This trading data is preliminary since later submissions might lead to subsequent corrections.

Annual comparison of trading volumes 2019 vs. 2020

€ bn 2019 2020
(Gross) Trading volume 4,091 4,255
Net trading volume 120.1 267.3

In 2020, trading volumes totaling 4,255 bn were reported by the banks in the Bund Issues Auction Group. This is 4 % more than in the previous year, which saw the lowest turnover since statistics began in 2005. In addition, several effects ensured that 2020 was an extraordinarily exciting year on both the primary and secondary market: The first Green Federal securities have been issued, the Covid 19 pandemic caused a significantly higher issuance volume, some of which did not even reach the secondary market, new maturities for Federal bonds and the first syndicates since 2015.

As a result of the doubling of issuance volume, net trading volume in 2020 also jumped year-on-year from € 120 bn to around € 267 bn, a new record.

Funding tools 2020

Trading volume - Funding tools

Green Federal securities (Green) have enriched the otherwise relatively static analysis of trading by instrument since September: Although € 24 bn ingreen turnover is low in relation to total turnover, it is considerable given an issuance volume of only € 11.5 bn which, moreover, only circulated completely from the second issue in November onwards. Turnover in money market paper, Bubill, which were issued in 2020 in the previous record volume of € 181 bn, marked an equally impressive high. Compared with 2019, trading grew more than threefold. 30-year Federal bonds (Bund30) recorded the highest turnover since 2008, while all other Federal securities were traded less than a year earlier.

Federal Treasury notes (Schatz) and ten-year Federal bonds (Bund10) even recorded the lowest turnover since 2005 - although turnover in the newly introduced 7- and 15-year maturities is already included in the ten-year figure. However, the analysis by residual maturity (not presented here) shows a more than two-and-a-half times higher trading volume in the residual maturity band around 15 years, whereas in 2020 trading in the 5- and 10-year range actually declined.

Gross trading (in € bn) 2019 2020
Bobl 751 694
Bubill 116 421
Bund10 2,230 2,063
Bund30 339 434
Green 0 24
ILB 126 114
Schatz 528 504

Net trading volume - Funding tools

The new Federal securities introduced in 2020 emerge more clearly in the net view, which ultimately correlates strongly with issuance activity in the primary market. Thus, the net turnover in the new Green Federal Securities segment amounts to € 4.4 bn. Net turnover in 10- (as well as 7- and 15-) year Federal bonds almost doubled compared with 2019 to € 55 bn, as did that of thirty-year federal bonds to more than €12 bn.More than a fivefold increase to € 124 bn was achieved for Bubills. There was no decline for any paper.

Net trading (in € bn) 2019 2020
Bobl 27.8 32.2
Bubill 23.7 123.9
Bund10 28.9 55.1
Bund30 5.5 12.4
Green 0 4.4
ILB 1.7 3.8
Schatz 32.5 35.7

Regions 2020

Trading volume - Regions

In terms of the geographical distribution of trading volumes, the ranking and thus the importance of the regions did not change, and the respective trading volumes changed only slightly. With the rest of Europe (Europe excluding the euro area countries), more than half of the volume was again traded in Federal securities.

Nevertheless, in 2020 this was only enough for the lowest value since the beginning of the statistics. For years, counterparties from the Euro area have contributed a good fifth of trading turnover, making them the second most important region, and in 2020 they achieved the highest turnover since 2013. Slightly more Federal securities were traded in Asia and the Americas. With counterparties from the Arab states, the lowest turnover since the start of the statistics was in Federal securities.

Gross trading (in € bn) 2019 2020
Africa 2 4
America 559 598
Arabian countries 15 11
Asia 253 256
Euro area 1,042 1,196
Other Europe 2,220 2,190

Net trading volume - Regions

In 2020, the Euro area replaced the rest of Europe (excluding the Euro area) as the most important net buyer region, with a spectacular increase of almost € 130 bn reaching € 132 bn. At the same time, however, net purchases from the rest of Europe were the highest since 2015 at € 107 bn. At € 25 bn, net purchases from the Americas exceeded the previous year's level by almost € 3 bn and reached their highest level since 2007. Net trade figures with Asia, Arab states and Africa were comparatively insignificant, as in 2019.

Net trading (in € bn) 2019 2020
Africa 0.0 1.9
America 21.6 25.0
Arabian countries 0.0 -1.1
Asia 1.6 2.8
Euro area 2.1 131.6
Other Europe 94.7 107.2

Institutions 2020

Trading volume - Institutions

As in recent years, asset managers and brokers are neck and neck in terms of the highest turnover among counterparties. In total, both are responsible for more than half of the turnover in German Government securities, at around € 1.2 trillion each. For brokers, however, this represents a slight decline compared with 2019 - to the lowest turnover since the start of the statistics in 2005. Banks, which for years have been the third most important trading partners, contributing around 20% to the total trading volume, also generated the lowest turnover since the start of the statistics in 2020.
By contrast, turnover by pension funds reached its highest level since 2013. Central banks (and other public institutions), the fourth most important counterparties, also turned over significantly more in 2020 compared to the previous year's minimum. After only a slight decline in turnover in 2019, hedge funds traded more in German Government securities in 2020 than ever before, continuing the positive trend they have now established since 2015.

Gross trading (in € bn) 2019 2020
Asset manager 1,138 1,202
Banks 896 781
Broker 1,192 1,192
Hedge funds 335 373
Pension funds 51 68
Other 47 47
Insurances 36 37
Central banks 395 555

Net trading volume - Institutions

By far the most important net buyers in 2020 were again central banks. After their net purchases of € 55 bn in 2018 still marked the time series low, they tripled in 2020 starting from the € 71 bn in 2019 to the new time series high of € 205 bn. In combination with the analysis by region, it can be assumed that a large share of demand in the Euro area resulted from the ECB's government bond purchase programs.

For the first time since 2010, pension funds also bought in double digits in 2020, with net purchases of more than € 10 bn - a doubling of the previous year's purchases, just like asset managers, whose net purchases rose from € 29 bn to € 61 bn. They thus surpassed banks as net buyers for the third year in a row since 2018 and hedge funds for the first time since 2017 (2020: € 24 bn, down € 5 bn vs. 2019) as the second most important net buyers. Banks returned to their buying power before the start of the ECB purchase programme in 2015 with € 37 bn in 2020.
The highest net sales since the start of the statistics were made via brokers in 2020.

Net trading (in € bn) 2019 2020
Asset manager 28.8 61.0
Banks 1.4 37.3
Broker -14.6 -77.4
Hedge funds 29.2 24.5
Pension funds 4.3 10.3
Other 0.7 5.2
Insurances -0.4 1.6
Central banks 70.8 204.8