Recent economic performance in the euro area has once again raised the possibility of the ECB conducting asset purchases. This column sorts security-level portfolio holdings data by investor type and across countries in the euro area to study portfolio rebalancing during the ECB purchase programme from 2015-17. There was a material difference in the impact on investors by geography – with foreign investors selling more than half of purchases.
Ralph Koijen, François Koulischer, Benoît Nguyen, Motohiro Yogo, 18 September 2019
Ellen Ryan, Karl Whelan, 05 April 2019
The EU’s asset purchase programme saw its central banks’ reserve balances increase to unprecedent levels. This column analyses the response of banks in the euro area to this expansion in system-wide reserves, in particular whether they absorbed the excess liquidity or tried to push it off their balance sheets. The findings suggest that banks dealt with the increased reserves with the purchase of debt securities or paying down funding sources rather than lending to the real economy.
Masazumi Hattori, Andreas Schrimpf, Vladyslav Sushko, 17 November 2013
This column argues that asset purchases and forward guidance by central banks can be effective in reducing financial market participants’ tail-risk perceptions. US data suggest that, since their inception in 2008, the unconventional policies adopted by the Federal Reserve have significantly compressed perceptions of tail risk. Despite increases in risk premia during the recent ‘tapering’ episode, estimates of tail-risk perceptions still remain significantly below the levels observed when the measures were introduced. Still, the effects of exit on tail-risk perceptions remain uncertain, and will require careful monitoring.
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