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The article discusses the shift in the corporate funding model in Europe from loans to bonds. It states that the shift to a U.S. style funding system for corporate bonds has been recognized as a healthier model by loans bankers. According to Christopher Marks, head of debt capital markets Europe at BNP Paribas in London, England, the investor focus on the bond market at some point will need to be relaxed and give way to a wider range of asset classes, but they will remain conservative into 2010.

The article focuses on the popularity of corporate bonds with investors. It states that the attraction of bonds is due to low rates and investor enthusiasm. It mentions that the U.S. Federal Reserve Board lowered the federal funds rate (FFR) target to 1% in 2003. It comments that FFR is what banks charge each other for overnight funds, and that this helps indicate the direction of interest rates.

The article provides information related to corporate bonds. As financial instruments that steadily throw off cash, corporate bonds are a no-brainer. But until a few years ago, they were a tricky proposition for the average investor. Buying corporate bonds on the open market is even more complicated. Prices shift from minute to minute, and brokers often take a hefty, disguised markup by cutting into the investor's interest rates. But that has changed, thanks to a simplified and more affordable type of bond called the retail note. Offered primarily by Merrill Lynch, ABN Amro's LaSalle investment banking division, and Chicago boutique firm Incapital, retail notes are priced at $1,000 apiece, with some "baby bonds" available for $25. The bonds are now issued by 25 blue-chip companies ranging from Bank of America to Ford to GE, and the value of the notes they've issued has doubled to $150 billion in the past three years. As with any bond, of course, there's always the chance that an issuer will default, but with retail notes it's easier to buy several to spread out one's risk.

This article offers news briefs related to banking in the U.S. It is stated that money managers are investing in corporate bonds because they are perceived as stable investments during the economic downturn. Investors who are nervous about the stability of the stock market and the economy are being advised to wait rather than take action. It is predicted that the likelihood of corporate bonds defaulting is high.