The volatility of risky assets remained "extraordinarily subdued", given the concerns about the ongoing euro area debt crisis and the poor outlook for economic growth, the Bank of International Settlements (BIS) said in its quarterly review, released Monday. The report noted that volatility was low compared to recent history in credit, foreign exchange and equity markets, the report said. The combination of weak growth and portfolio reallocations driven by concerns about sovereign risk in the euro area along with central bank actions have pushed yields on the debt of a number of highly rated sovereigns to unprecedented lows, particularly in Europe. In some European countries, real government bond yields are in negative territory. This suggests that equity valuations have become more attractive relative to bonds, BIS said. "As a consequence, assets traditionally perceived as risky may have been less affected by the deterioration of the growth outlook and the euro area strains compared to previous episodes." Ultra-low sovereign yields prompted investors to look beyond benchmark government bonds in search of reasonably safe investments that offered some extra yield. "Such portfolio rebalancing is one of the key objectives of unconventional policies, intended to stimulate investor risk-taking by reducing the attractiveness of government securities relative to risky assets," the report said.