Banks Flood Bond Markets to Repay Covid Loans, Raising Concerns of Oversupply and Reliance on Short-Term Investors

• European and British banks raising money to repay giant Covid loans by selling new debt like covered bonds • Flood of new bond supply raises worries about demand fading and banks leaning too much on "fast money" hedge funds • Banks sold record $227B of covered bonds in 2022; may hit saturation point with buyers unable to absorb more • Central banks managing end of cheap pandemic loan programs without putting borrowing banks in funding strain • Banks weighing options like bonds, deposits, central bank loans but higher rates mean far costlier financing than before