For anyone with a basic grasp of economics, the current situation in the convertible bond market flies in the face of the aggregate supply curve theory. In plain English, there is more demand than ever before from investors in the sector, yet new supply – in Europe at least – has declined to its lowest level in more than a decade.

This imbalance between supply and demand has driven prices up in the secondary market, hitting investors who are bound by their mandates to invest in convertibles. Investors complain banks are not bringing a high or diverse enough range of issue to market, while banks in return argue that low interest rates, low volatility and a lack of M&A activity mean a recovery in equity-linked issuance any time soon is unlikely.