Bond ETFs have grown from $10 bln in 2009 to $1.2 tln. They significantly deviate from the original ETF principle. In effect they are derivative products, reliant on complex structures that may be open to abuse. Also, corporate bonds are less liquid, but tougher bank capital rules have made capital-intensive activities, like market making, unattractive.

Belgium plans to lure mom-and-pop investors with a 10-year bond that pays a 3% coupon, more than the 1.74% offered by Belgian banks. This could pave the way for a green retail bond. European countries hope that investors will buy more government bonds as central banks exit the market. Fitch estimates that around €650 billion will be needed in 2023.