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Following the imprint of the ECB's asset purchase programme on global bond and deposit flows

Stefan Avdjiev (), Mary Everett () and Hyun Song Shin

BIS Quarterly Review, 2019

Abstract: We trace the imprint of the ECB's expanded asset purchase programme (APP) on international bond portfolios and euro-denominated deposits. Our analysis suggests that non-bank financial institutions (NBFIs) located outside the euro area sold large volumes of euro area government bonds and kept a substantial fraction of the proceeds as euro-denominated deposits, primarily in UK-resident banks. Since the APP's modalities did not allow the NBFIs to engage directly with the Eurosystem, their deposits left an international trail of euro-denominated claims. Our findings highlight the role of the United Kingdom as a gateway to the euro area financial system for investors outside the euro area.

JEL-codes: E50 E52 F30 F40 (search for similar items in EconPapers)
Date: 2019
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