Unconventional Monetary Policy and Corporate Bond Issuance

34 Pages Posted: 14 Nov 2019

See all articles by Roberto A. De Santis

Roberto A. De Santis

European Central Bank (ECB) - Directorate General Economics

Andrea Zaghini

European Central Bank (ECB)

Date Written: November, 2019

Abstract

We assess the effect and the timing of the corporate arm of the ECB quantitative easing (CSPP) on corporate bond issuance. Because of several contemporaneous measures, to isolate the programme effects we rely on one key eligibility feature: the euro denomination of newly issued bonds. We find that the significant increase in bonds issuance by eligible firms is due to the CSPP and that this effect took at least six months to unfold. This result holds even when comparing firms with similar ratings, thus providing evidence that unconventional monetary policy can foster a financing diversification regardless of firms risk profile.

Keywords: corporate bond market, CSPP, quantitative easing

JEL Classification: E52, G15, G32

Suggested Citation

De Santis, Roberto A. and Zaghini, Andrea, Unconventional Monetary Policy and Corporate Bond Issuance (November, 2019). ECB Working Paper No. 2329, Available at SSRN: https://ssrn.com/abstract=3486802

Roberto A. De Santis (Contact Author)

European Central Bank (ECB) - Directorate General Economics ( email )

Kaiserstrasse 29
D-60311 Frankfurt am Main
Germany

Andrea Zaghini

European Central Bank (ECB) ( email )

Sonnemannstrasse 22
Frankfurt am Main, 60314
Germany

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