European governments’ efforts to stamp out outsized bids from hedge funds at bond sales appear to be bearing fruit, with order books for the most recent issues showing a steep decline from levels seen at the start of this year. Reuters reported in April that huge bids for new bonds officials deemed inflated had become a headache for borrowers such as France, Spain, and the European Union, forcing them to take measures such as capping orders. That came after a series of bond sales where hedge funds consistently submitted bids far in excess of what they could reasonably hope to receive.
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