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Title: Sovereign Bond Purchases and Risk Sharing: Myth and Reality of the European QE
Authors: Macchiarelli, C
Gerba, E
Keywords: bond;central bank;economic policy;euro area;European Central Bank;Eurosystem;monetary policy
Issue Date: Jun-2015
Publisher: European Union
Citation: In: Sovereign bond purchases and risk sharing arrangements: Implications for euro-area monetary policy : monetary dialogue 15 June 2015 : compilation of notes, pp. 69 - 96
Series/Report no.: European Union. Directorate-General for Internal Policies of the Union. Policy Department A. Economic and Scientific Policy;IP/A/ECON/2015-02
European Parliament. Committee on Economic and Monetary Affairs;PE 587.288
Abstract: In March, the Eurosystem started to purchase on the secondary market euro- denominated bonds issued by governments, agencies and European institutions. The total amount of bond purchases is estimated to 1.14 trillion EUR until September 2016, or 60 billion EUR per month. The size of the Expanded Asset Purchase Program raises issues of scarcity of bonds to be purchased by the Eurosystem without inducing a fall of yields at record (negative) levels. Several sovereign bonds (Germany, France, Netherlands) already exhibit negative rates. Against this background, this paper reviews the main features of government bond markets in the Euro-area, including its size, structure, and current developments. Moreover it discusses the (potential) financial risks that the Eurosystem might be taking on its balance sheet in view of the currently low (or negative) yields and (expected) shortage in supply of sovereign bonds.
Description: This document was requested by the European Parliament's Committee on Economic and Monetary Affairs.
Gov't Doc #: IP/A/ECON/2015-02
PE 587.288
ISBN: 978-92-823-9539-4
Other Identifiers: IP/A/ECON/2015-02
Appears in Collections:Economics and Finance
Dept of Economics and Finance Research Papers

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