Following the Imprint of the ECB's Asset Purchase Programme on Global Bond and Deposit Flows

13 Pages Posted: 7 Mar 2019

See all articles by Stefan Avdjiev

Stefan Avdjiev

Bank for International Settlements (BIS)

Mary Everett

Central Bank of Ireland

Hyun Song Shin

Bank for International Settlements (BIS)

Date Written: March 5, 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 Classification: E50, E52, F30, F40

Suggested Citation

Avdjiev, Stefan and Everett, Mary and Shin, Hyun Song, Following the Imprint of the ECB's Asset Purchase Programme on Global Bond and Deposit Flows (March 5, 2019). BIS Quarterly Review, March 2019. Available at SSRN: https://ssrn.com/abstract=3348191

Stefan Avdjiev (Contact Author)

Bank for International Settlements (BIS) ( email )

Centralbahnplatz 2
Basel, Basel-Stadt 4002
Switzerland

Mary Everett

Central Bank of Ireland ( email )

P.O. Box 559
Dame Street
Dublin, 2
Ireland

Hyun Song Shin

Bank for International Settlements (BIS) ( email )

Centralbahnplatz 2
Basel, Basel-Stadt 4002
Switzerland

HOME PAGE: http://www.bis.org/author/hyun_song_shin.htm

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