Figure 1 show that the domestication of Euro area bond markets has been steeper for peripheral banks, whose share of non-domestic bonds fell to 13% this year, a level last seen in early 2000, at the beginning of the monetary union. The equivalent share for core banks was 30%, the same level as in 2002. Italy and Spain, which have the largest bond markets among peripheral nations, have been driving these trends. Indeed by looking at data from the Spanish Treasury and the Italian central bank, the picture we get is that non-domestic investors' share of the Spanish and Italian government bond markets has been falling steadily over the past years. Monthly data from the Spanish Treasury show that this share fell to below 25% in June. More specifically, non-residents held €163bn of Spanish government bonds excluding T-bills as of June 2012 vs. a total stock of €504bn. Of this €163bn, our fixed income colleagues attribute €37bn to the ECB’s SMP, leaving €123bn for private sector non-residents. For comparison, the share of private sector non-residents was 40% in June 2011 and 45% at the end of 2010.