Bruegel: Sovereign bond holdings in the euro area – the impact of QE

19 May 2016

Authors look at the effect of QE on sectoral holdings of government bonds, based on their 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.

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