Flexible asset purchases and repo market functioning

Adriana Grasso and Andrea Poinelli

No 3013, Working Paper Series from European Central Bank

Abstract: Flexibility has progressively become a distinctive feature of the implementation of the Eurosystem’s asset purchases. In its many manifestations, flexibility has also been used by asset managers in the daily selection of sovereign bonds to limit the impact of asset purchases on repo market specialness. This study shows that, since the inception of the Public Sector Purchase Programme, flexible purchases of bonds greatly mitigated the Eurosystem’s footprint on the repo market. JEL Classification: E50, E52, E58, G10, G18

Keywords: asset purchases; flexibility; market neutrality; repo; specialness (search for similar items in EconPapers)
Date: 2025-01
New Economics Papers: this item is included in nep-eec, nep-mac and nep-mon
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Persistent link: https://EconPapers.repec.org/RePEc:ecb:ecbwps:20253013

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