The Impact of the Eurosystem's Covered Bond Purchase Programme on the Primary and Secondary Markets

36 Pages Posted: 19 Jan 2011

See all articles by John Beirne

John Beirne

European Central Bank (ECB)

Lars Dalitz

European Central Bank (ECB)

Jacob Ejsing

European Central Bank (ECB)

Magdalena Grothe

European Central Bank (ECB)

Simone Manganelli

European Central Bank (ECB)

Fernando Monar

European Central Bank (ECB)

Benjamin Sahel

European Central Bank

Matjaz Susec

European Central Bank (ECB)

Jens Tapking

European Central Bank (ECB)

Tana Vong

European Central Bank (ECB)

Date Written: January 10, 2011

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.

Keywords: covered bonds, liquidity, primary market, secondary market

JEL Classification: G12, G14, G21

Suggested Citation

Beirne, John and Dalitz, Lars and Ejsing, Jacob and Grothe, Magdalena and Manganelli, Simone and Monar, Fernando and Sahel, Benjamin and Susec, Matjaz and Tapking, Jens and Vong, Tana, The Impact of the Eurosystem's Covered Bond Purchase Programme on the Primary and Secondary Markets (January 10, 2011). ECB Occasional Paper No. 122, Available at SSRN: https://ssrn.com/abstract=1646280

John Beirne (Contact Author)

European Central Bank (ECB) ( email )

Sonnemannstrasse 22
Frankfurt am Main, 60314
Germany

Lars Dalitz

European Central Bank (ECB) ( email )

Sonnemannstrasse 22
Frankfurt am Main, 60314
Germany

Jacob Ejsing

European Central Bank (ECB) ( email )

Kaiserstrasse 29
D-60311 Frankfurt am Main
Germany
00496913445312 (Phone)

Magdalena Grothe

European Central Bank (ECB) ( email )

Sonnemannstrasse 22
Frankfurt am Main, 60314
Germany

Simone Manganelli

European Central Bank (ECB) ( email )

Kaiserstrasse 29
Frankfurt am Main, 60311
Germany

HOME PAGE: http://www.simonemanganelli.org

Fernando Monar

European Central Bank (ECB) ( email )

Sonnemannstrasse 22
Frankfurt am Main, 60314
Germany

Benjamin Sahel

European Central Bank ( email )

Sonnemannstrasse 22
Frankfurt am Main, 60314
Germany

Matjaz Susec

European Central Bank (ECB) ( email )

Sonnemannstrasse 22
Frankfurt am Main, 60314
Germany

Jens Tapking

European Central Bank (ECB) ( email )

Sonnemannstrasse 22
Frankfurt am Main, 60314
Germany

Tana Vong

European Central Bank (ECB) ( email )

Sonnemannstrasse 22
Frankfurt am Main, 60314
Germany

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
798
Abstract Views
3,529
rank
34,359
PlumX Metrics