royalplayingcards| MSCI launches consultations on whether EU bonds should be included in government bond index

Gelonghui May 7| MSCI is asking investorsroyalplayingcards, whether the EU should be soldroyalplayingcardsBonds are included in its government bond index. The EU is currently considered an issuer of supranational institutions, a key reason why the EU says its borrowing costs are higher than comparable rated European governments. The consultation document shows that MSCI asked investors whether the bonds should be included in its government benchmark, whether they should be included gradually or in a one-time manner. EU bonds have consistently outperformed similar bonds on expectations that inclusion in the index will trigger buying. The EU has grown into one of the region's largest issuers since it began increasing bond issuance in 2020, but officials expressed disappointment that its financing costs are not as low as those of some eurozone members. An EU survey of investors last year found that inclusion in the index was "the single most important step remaining" to make EU bonds trade and price similar to European government bonds. MSCI said feedback on its proposals would be open until May 24, and a final decision would be announced by the end of this month.