Roel Beetsma, Josha van Spronsen, 24 January 2020

For the last decade, euro area countries have undertaken substantial debt issuances in order to maintain or bolster international capital market access. This column shows that the ECB's unconventional monetary policy dampens yield cycles in secondary markets for euro area sovereign debt around new debt auctions. This dampening effect tends to be larger when market volatility is higher, and this can be used to minimise any instability generated, for example, by different countries’ issuances occurring close together or the spillover effects of one country’s auctions on another. 


CEPR Policy Research