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Corporate Bond Purchase Scheme: design, operation and impact

Author

Listed:
  • Belsham, Thomas

    (Bank of England)

  • Rattan, Alex

    (Bank of England)

  • Maher, Rebecca

    (Bank of England)

Abstract

In August 2016 the Bank of England’s Monetary Policy Committee voted for a package of measures to support growth and return inflation to target. The measures included the purchase, via the Corporate Bond Purchase Scheme (CBPS), of up to £10 billion of UK corporate bonds. •The design of the CBPS was driven by considerations of market structure and the ultimate aim of imparting broad macroeconomic stimulus. The CBPS departed from past asset purchase programmes along a number of key dimensions, including the size of allocations and auction pricing. •The scheme appears to have had a positive impact on the sterling corporate bond market, prompting a sharp decline in corporate bond spreads on the day of the announcement and a rise in issuance in the months that followed.

Suggested Citation

  • Belsham, Thomas & Rattan, Alex & Maher, Rebecca, 2017. "Corporate Bond Purchase Scheme: design, operation and impact," Bank of England Quarterly Bulletin, Bank of England, vol. 57(3), pages 170-181.
    • Handle: RePEc:boe:qbullt:0228
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    File URL: https://www.bankofengland.co.uk/-/media/boe/files/quarterly-bulletin/2017/cbps-design-operation-and-impact.pdf?la=en&hash=3CE225BFDA3AC65A154ED43A817E23C976A5FEE0
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    Cited by:

    1. Lena Boneva & David Elliott & Iryna Kaminska & Oliver Linton & Nick McLaren & Ben Morley, 2022. "The Impact of Corporate QE on Liquidity: Evidence from the UK," The Economic Journal, Royal Economic Society, vol. 132(648), pages 2615-2643.
    2. Boneva, Lena & Islami, Mevlud & Schlepper, Kathi, 2021. "Liquidity in the German corporate bond market: Has the CSPP made a difference?," Discussion Papers 08/2021, Deutsche Bundesbank.
    3. D’Amico, Stefania & Kaminska, Iryna, 2019. "Credit easing versus quantitative easing: evidence from corporate and government bond purchase programs," Bank of England working papers 825, Bank of England.
    4. Pinter, Gabor & Uslu, Semih, 2022. "Comparing search and intermediation frictions across markets," Bank of England working papers 974, Bank of England.
    5. Mallaburn, David & Roberts-Sklar, Matt & Silvestri, Laura, 2019. "Resilience of trading networks: evidence from the sterling corporate bond market," Bank of England working papers 813, Bank of England.

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