Following the Imprint of the ECB's Asset Purchase Programme on Global Bond and Deposit Flows
13 Pages Posted: 7 Mar 2019
Date Written: March 5, 2019
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: Suggested Citation