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

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

No 122, Occasional Paper Series from European Central Bank

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

Keywords: covered bonds; liquidity; primary market; secondary market (search for similar items in EconPapers)
Date: 2011-01
Note: 733190
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Citations: View citations in EconPapers (79)

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Persistent link: https://EconPapers.repec.org/RePEc:ecb:ecbops:2011122

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