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When central banks buy corporate bonds: Target selection and impact of the European Corporate Sector Purchase Program
- Source :
- Journal of Financial Stability, 54(June 2021). Elsevier
- Publication Year :
- 2021
-
Abstract
- We study the timing of the European Corporate Sector Purchase Program and its direct effect on corporate financing decisions. Consistent with the goal of reducing credit premia, more timely purchases are observed for eligible bonds characterized by higher credit risk. Firms effectively targeted increase their relative use of market debt and the maturity of newly issued bonds more than eligible but not (yet) targeted issuers. The estimated effect is not driven by the verified relation between selection and credit risk. The program has fostered the ability to tap credit markets directly especially for eligible corporations whose bonds are actually purchased.
- Subjects :
- Capital structure
Economics
media_common.quotation_subject
Economics, Econometrics and Finance(all)
Financial system
B Journal
Debt maturity
Corporate finance
Quantitative easing
Debt
0502 economics and business
Business sector
media_common
040101 forestry
050208 finance
Bond
05 social sciences
Corporate Sector Purchase Program
04 agricultural and veterinary sciences
Maturity (finance)
Quantitative Easing
Econometrics and Finance(all)
Issuer
0401 agriculture, forestry, and fisheries
Business
Corporate bonds
General Economics, Econometrics and Finance
Finance
Credit risk
Subjects
Details
- Language :
- English
- ISSN :
- 15723089
- Volume :
- 54
- Database :
- OpenAIRE
- Journal :
- Journal of Financial Stability
- Accession number :
- edsair.doi.dedup.....8e15042b42b7c4c8c7267ebe563fb54f