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The impact of the eurosystem’s covered bond purchase Programme on the primary and secondary Markets
This paper provides an assessment of the impact of the covered bond purchase programme
hereafter referred to as the CBPP) relative to its policy objectives. The analysis presented
on the impact of the CBPP on both the primary and secondary bond markets indicates that
the Programme has been an effective policy instrument. It has contributed to: (i) a decline
in money market term rates, (ii) an easing of funding conditions for credit institutions and
enterprises, (iii) encouraging credit institutions to maintain and expand their lending to clients, and (iv) improving market liquidity in important segments of the private debt securities market. The paper also provides an overview of the investment strategy of the the Eurosystem with regard to the CBPP portfolio.
hereafter referred to as the CBPP) relative to its policy objectives. The analysis presented
on the impact of the CBPP on both the primary and secondary bond markets indicates that
the Programme has been an effective policy instrument. It has contributed to: (i) a decline
in money market term rates, (ii) an easing of funding conditions for credit institutions and
enterprises, (iii) encouraging credit institutions to maintain and expand their lending to clients, and (iv) improving market liquidity in important segments of the private debt securities market. The paper also provides an overview of the investment strategy of the the Eurosystem with regard to the CBPP portfolio.