The Liquidity Effects of Official Bond Market Intervention

Pooter, Michiel De; Martin, Robert F.; Pruitt, Seth

doi:10.1017/s0022109017000898

Cited by 64 publications

(43 citation statements)

References 35 publications

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“…Although Acharya, Imbierowicz, Steffen, and Teichmann (2015) do find some announcement effects, they note that it was actual purchases and not the signaling of the policy that drove the lower bond yields. De Pooter, Martin, and Pruitt (2016) find consistent results demonstrating that the SMP helped lower the sovereign bond liquidity premium. Garcia-de Andoain, Heider, Hoerova, and Manganelli (2016) find that ECB liquidity injections helped stabilize the overnight unsecured interbank market.…”

Section: Institutional Background and Related Literaturesupporting

confidence: 71%

Did ECB Liquidity Injections Help the Real Economy?

Daetz

Subrahmanyam²,

Tang

et al. 2017

SSRN Journal

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We investigate the corporate-level efficacy of unconventional monetary interventions using Longer-Term Refinancing Operations (LTROs), through which the European Central Bank provided long-term funds to banks. We find that Eurozone corporations did not increase investments even when their banks retained LTRO funds for a long period. However, counterfactual analysis suggests that LTROs helped Eurozone corporations sustain their investments better than European corporations outside the Eurozone. The LTROs were more effective in countries with accommodative fiscal policies. Our findings demonstrate that monetary interventions help decelerate economic decline, but also reveal the difficulty of boosting investments by injecting liquidity into the banking system.

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Section: Institutional Background and Related Literaturesupporting

confidence: 71%

Did ECB Liquidity Injections Help the Real Economy?

Daetz

Subrahmanyam²,

Tang

et al. 2017

SSRN Journal

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“…This impact is stronger in markets that are smaller and less liquid, and where risk premiums are higher. (Also see Trebesch and Zettelmeyer 2018;and De Pooter, Martin, and Pruitt 2018. ) Nevertheless, the SMP was not able to stem the rising redenomination risk.…”

Section: Addressing Impairments In the Monetary Policy Transmission Pmentioning

confidence: 99%

The European Central Bank's Monetary Policy during Its First 20 Years

Hartmann¹,

Smets²

2018

Brookings Papers on Economic Activity

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, the European Central Bank (ECB) celebrated its 20th anniversary. This paper provides a comprehensive view of the ECB's monetary policy over these two decades. The first section gives a chronological account of the macroeconomic and monetary policy developments in the euro area since the adoption of the euro in 1999, going through four cyclical phases "conditioning" ECB monetary policy. We describe the monetary policy decisions from the ECB's perspective and against the background of its evolving monetary policy strategy and framework. We also highlight a number of the key, critical issues that were the subject of debate. The second section contains various assessments. We analyze the achievement of the price stability mandate and developments in the ECB's credibility, and we also investigate the ECB's interest rate decisions through the lens of a simple empirical interest rate reaction function. Finally, we present the ECB's framework for thinking about nonstandard monetary policy measures and review the evidence on their effectiveness. One of the main themes of the paper is how the ECB utilized its monetary policy to respond to the challenges posed by the European twin financial and sovereign debt crises and the subsequent slow economic recovery, making use of its relatively wide range of instruments, defining new ones where necessary, and developing the strategic underpinnings of its policy framework.

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“…Risiko sistematis terkait erat dengan perubahan dalam kondisi ekonomi makro, salah satunya perubahan nilai tukar oleh karena itu studi ini menganalisis pengaruh dari nilai tukar terhadap yield obligasi. Beberapa studi terkait hubungan antara yield obligasi dan nilai tukar, yaitu Pooter et al (2018), Longstaff dan Schwartz (1995),Collin- Dufresne et al (2001), Duffie e et al (2007), Bonfim (2009) serta Tang dan Yan (2010).…”

Section: Pendahuluanunclassified

Analisis Determinan Obligasi Korporasi

Ahmad¹,

Wahyudiani²

2019

JABM

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This study aims to analyze the effect of interest rates, exchange rates, bond ratings, and DER on yield to maturity of corporate bonds in the Indonesia Stock Exchange for the period 2011-2014. The analysis technique used panel data analysis. The results of the study show that interest rates (X1) had a positive effect and statistically significant on yield to maturity. The exchange rate (X2) and bond rating (X3) had a negative effect and significant, while DER (X4) had a positive sign and significant. The important finding was the negative relationship of the exchange rate (X2) to yield to maturity. The negative relationship of the exchange rate occurred because investors perceived that holding rupiah (Rp) currency considered safer than other currencies; hence the rupiah exchange rate against the USD was considered relatively stable. This result was contrary to the basic theory formulated in the hypothesis.

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The Liquidity Effects of Official Bond Market Intervention

Cited by 64 publications

References 35 publications

Did ECB Liquidity Injections Help the Real Economy?

Did ECB Liquidity Injections Help the Real Economy?

The European Central Bank's Monetary Policy during Its First 20 Years

Analisis Determinan Obligasi Korporasi

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