Pia Huttl, Silvia Merler, (2016), “Sovereign bond holdings in the euro area – the impact of QE”, Bruegel, 19 May
Since the announcement of the QE programme by the European Central Bank (ECB) on 22 January 2015, national central banks have been buying government and national agency bonds. In this post we look at the effect of QE on sectoral holdings of government bonds, based on our recently updated dataset. In conclusion, the most recent update of data on sectoral holdings of government bonds allow us to gauge the impact of the ECB’s asset purchase programme on the distribution of government debt across different holding sectors. While the increase in the share held by domestic central banks was expected, the changes in other sectors’ holdings are less obvious. The increase in the share of bonds held by national central banks is mostly offset by a decrease in holdings by other sectors, and less so by a decrease in the holdings of domestic banks. Overall, it appears that the ECB’s purchases have not yet helped reverse the marked increase in banks’ holdings of domestic government debt which happened during the crisis.
Relevant posts
- Blanchard, Olivier, Mauro, Paolo, Acalin, Julien, (2016), “The case for growth-indexed bonds in advanced economies today”, Voxeu, 16 February
- De Grauwe, Paul, Ji, Yuemei, (2015), ” Why the ECB should not insist on repayment of its Greek bonds”, Voxeu, 16 July