Corporate bonds recover

Fear of a sustained economic crisis led to capital market interest rates hitting a low around the end of 2008/beginning of 2009. Over the course of the year, however, investors became more willing to take risks. Capital market interest rates rose, although they remained at a low level. At the end of the year, 10-year German treasury bonds were yielding 3.39%, 0.44 percentage points higher than at the end of 2008. In the same period, the return on 10-year US treasury bonds increased by 1.62 percentage points to 3.84%. Corporate bonds also benefited from the economic recovery over the course of the year. The risk premiums were in some cases below those seen prior to September 2008 when the financial market crisis escalated.