Financial Intermediation Through Financial Disintermediation: Evidence from the ECB Corporate Sector Purchase Programme

Ertan, Aytekin; Kleymenova, Anya; Tuijn, Marcel

doi:10.2139/ssrn.3197214

Cited by 18 publications

(18 citation statements)

References 34 publications

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“…A related literature investigates a di¤erent spillover e¤ect of the CSPP: NFCs eligible to the CSPP substituted bank loans with bond debt; this, in turn, allowed banks to increase the lending to the NFCs which did not bene…t from the CSPP. Grosse-Rueschkamp et al (2019), which named this mechanism as the capital structure channel of monetary policy, address the issue by looking at loan syndication and large corporations, Ertan et al (2018) and Betz and De Santis (2019) focus on the credit supply of bank-dependent …rms, particularly small and medium enterprises.…”

Section: Related Literaturementioning

confidence: 99%

Unconventional monetary policy and corporate bond issuance

Santis

Zaghini

2021

European Economic Review

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We assess the e¤ect and the timing of the corporate arm of the ECB quantitative easing (CSPP) on corporate bond issuance. Because of several contemporaneous measures, to isolate the programme e¤ects we rely on one key eligibility feature: the euro denomination of newly issued bonds. We …nd that the signi…cant increase in bonds issuance by eligible …rms is due to the CSPP and that this e¤ect took at least six months to unfold. This result holds even when comparing …rms with similar ratings, thus providing evidence that unconventional monetary policy can foster a …nancing diversi…cation regardless of …rms' risk pro…le. We also highlight the impact of the programme on the real economic activity. The evidence suggests that while all …rms increased investment in capital expenditures and intangible assets, the CSPP induced eligible …rms to invest in marketable and equity securities, to repurchase their own stocks, to hold cash and to carry out short-term investment.

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Section: Related Literaturementioning

confidence: 99%

Unconventional monetary policy and corporate bond issuance

Santis

Zaghini

2021

European Economic Review

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“…We also document that firms substituted between bond characteristics after the CSPP announcement, whereas existing work focuses on substitution between bonds and bank loans (Arce et al, 2017;Betz and De Santis, 2019;Ertan et al, 2020;Galema and Lugo, 2019;Grosse-Rueschkamp et al, 2019).…”

Section: Related Literaturementioning

confidence: 94%

“…Grosse-Rueschkamp et al ( 2019) and Ertan et al (2020) show that eligible issuers substituted bank loans for bond issues. Banks, in turn, increased the supply of bank loans to ineligible firms, which used the loans to expand investment and employment.…”

Section: Real Economic Activitymentioning

confidence: 99%

“…However, bond-issuing firms may increase their leverage or pay lower interests compared to non-issuers if the latter face constraints in the credit market. Moreover, issuers' cash flow may either increase or decreases relative to non-issuers, because of the combined effects of a change in borrowing costs, issuance expenses, and spillover effects on non-issuers as those documented by Grosse-Rueschkamp et al (2019) and Ertan et al (2020).…”

Section: Did (Eligible) Issuers Benefit From the Program?mentioning

confidence: 99%

“…Although eligible issuers appear to grow more than ineligible issuers in terms of total assets and employment, the differences in outcomes are not statistically significant. Grosse-Rueschkamp et al (2019) and Ertan et al (2020) document that banks extended more credit to ineligible firms after the CSPP. These firms were therefore able to expand investments.…”

Section: Growth Ratesmentioning

confidence: 99%

See 2 more Smart Citations

Issuance and Valuation of Corporate Bonds with Quantitative Easing

Pegoraro

Montagna

2021

SSRN Journal

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Voluntary disclosures and monetary policy: evidence from quantitative easing

Vincenzi

2024

Rev Account Stud

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This study investigates the influence of central bank private-sector quantitative easing (QE) policies on firms’ voluntary disclosures. While the effects of QE on borrowing costs and asset prices are well documented, spillovers in the disclosure realm remain understudied. This study specifically analyzes the effects of the Corporate Sector Purchase Program (CSPP), a private-sector QE policy implemented by the European Central Bank (ECB) in 2016 targeting corporate bonds in the euro area. Applying a difference-in-differences methodology to pre- and post-CSPP periods, I find that firms whose bonds the central bank purchased under the CSPP decreased their voluntary disclosures, particularly those related to cash flows and liabilities. My analysis attributes this decrease to reduced demand for firm-specific information from the central bank. My findings highlight the indirect consequences of QE monetary policy tools on corporate disclosure and contribute to the understanding of the transmission of monetary policy and investor-clientele dynamics.

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Financial Intermediation Through Financial Disintermediation: Evidence from the ECB Corporate Sector Purchase Programme

Cited by 18 publications

References 34 publications

Unconventional monetary policy and corporate bond issuance

Unconventional monetary policy and corporate bond issuance

Issuance and Valuation of Corporate Bonds with Quantitative Easing

Voluntary disclosures and monetary policy: evidence from quantitative easing

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