All kinds of people invest in bonds, even when the government isn't enacting QE. My retirement investment account consist of government bonds, too. Investment banks earn money through IPO fees, merger fees, etc. They also can borrow money from depositors and have raised their initial capital from shareholders. As they're 'investment banks', their primary business is to select the best assets to invest their cash. These assets include other companies (aka stocks), properties and bonds. If you're in Australia and you have a superannuation account (i.e. government enforced savings), you're likely a bondholder too, unless you told your superannuation fund (the entity responsible for investing the forced savings) explicitly not to invest in bonds.