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The impact of the Eurosystem's covered bond purchase programme on the primary and secondary markets

Author

Listed:
  • Beirne, John
  • Tapking, Jens
  • Sahel, Benjamin
  • Sušec, Matjaž
  • Monar, Fernando
  • Manganelli, Simone
  • Grothe, Magdalena
  • Ejsing, Jacob
  • Dalitz, Lars
  • Vong, Tana

Abstract

This paper provides an assessment of the impact of the covered bond purchase programme (hereafter referred to as the CBPP) relative to its policy objectives. The analysis presented on the impact of the CBPP on both the primary and secondary bond markets indicates that the Programme has been an effective policy instrument. It has contributed to: (i) a decline in money market term rates, (ii) an easing of funding conditions for credit institutions and enterprises, (iii) encouraging credit institutions to maintain and expand their lending to clients, and (iv) improving market liquidity in important segments of the private debt securities market. The paper also provides an overview of the investment strategy of the the Eurosystem with regard to the CBPP portfolio. JEL Classification: E22, L63, L86, O3, O47

Suggested Citation

  • Beirne, John & Tapking, Jens & Sahel, Benjamin & Sušec, Matjaž & Monar, Fernando & Manganelli, Simone & Grothe, Magdalena & Ejsing, Jacob & Dalitz, Lars & Vong, Tana, 2011. "The impact of the Eurosystem's covered bond purchase programme on the primary and secondary markets," Occasional Paper Series 122, European Central Bank.
  • Handle: RePEc:ecb:ecbops:2011122
    Note: 733190
    as

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    File URL: https://www.ecb.europa.eu//pub/pdf/scpops/ecbocp122.pdf
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    covered bonds; liquidity; primary market; secondary market;
    All these keywords.

    JEL classification:

    • E22 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Investment; Capital; Intangible Capital; Capacity
    • L63 - Industrial Organization - - Industry Studies: Manufacturing - - - Microelectronics; Computers; Communications Equipment
    • L86 - Industrial Organization - - Industry Studies: Services - - - Information and Internet Services; Computer Software
    • O3 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence

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