Issuance so far this year of a mainstay of bank funding is at its most depressed since the financial crisis as lenders shed assets and shrink in the face of additional regulations and weak economic growth.

Banks around the world issued just $150 billion of senior unsecured debt in January and February this year, the lowest level of issuance since 2008.

The crisis in the euro zone and stiff requirements under Basel III global bank capital rules have had a particularly noticeable impact on banks in Europe. Many have either less need for funding or have hung on to money borrowed cheaply a year ago from the European Central Bank.

The amount of senior unsecured debt issued by banks in Europe in the first two months of this year was also at its lowest level since 2008 and, at just $66 billion, half what it was just two years ago.

There was also a sharp drop in issuance of covered bonds – debt secured against pools of loans that carries an additional bank guarantee – with European and global issuance at their lowest since 2009. – Copyright The Financial Times Limited 2013