Institutional bond investors are most concerned about the impact further ratings downgrades in the stricken monoline bond insurance sector will have the credit markets, with fears over a prolonged recession in the US and the consequences for emerging market economies also underpinning bearish sentiment among real money accounts.

In the latest fixed-income survey of 76 global investors by French bank BNP Paribas, respondents ranked the risk of further deterioration in the monoline sector top of five chief risks to the stability of the European credit markets over the next three months, highlighting the extent to which fears over the fragility of bond insurers has heightened this year.